BC Shipping News - December 2015/January 2016

INSIDE: LIQUID PETROLEUM GAS TANKERS

BC SHIPPING Commercial Marine News for Canada’s West Coast.

Volume 5 Issue 10

www.bcshippingnews.com

NEWS

December 2015 / January 2016

Tugs & Workboats

Tug and towboat industry recovery tempered by losses

Industry Insight

Mark Houghton, Chief Operating Officer, Ledcor Resources & Transportation, Marine Division

DEC

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Contents

NEWS

December 2015 / January Volume 5 Issue 10

Cover Story

26

43 Shipping 7

Editor’s note

8

In brief

12

20

By Jane McIvor

Industry traffic and news briefs

Industry insight

The holistic approach Mark Houghton, Chief Operating Officer, Ledcor Resources & Transportation, Marine Division Demonstrating the values that are evident throughout the Ledcor Group, Mark’s leadership of the Marine Division positions Ledcor as the company to watch for stellar growth.

History lesson

Abide with me: The story of the port’s little blue house

By Lea Edgar

22 24 26 32 33

Throwing stones in greenhouses: Global shipping and climate change after Paris

By Jeffrey J. Smith

Mission to Seafarers

Reverend Nick retires from the Mission

46

SS Beaver Awards

Recipients recognized for contributions to maritime industry

Tugs and towboats

Tug and towboat industry recovery tempered by losses

By Ray Dykes

Tugs

Saam Smit Towage Canada Inc. launches new ASD tug

Tugs

Revolutionary RAmora brings tele-operated capability to ship handling

35 Class

48 50

Legal affairs

Case comment on the recent court decision in Snow Valley Marine Services Ltd. v. Seaspan Commodore (The)

By David S. Jarrett

Event recap

International LNG in BC Conference attracts great interest

Cargo logistics

Informa brings the entire North American supply chain under one roof in San Diego and Montreal

By Peter Hurme

52 Manufacturing

Taking Kobelt to new heights

33

Bureau Veritas presentations yield useful information for local industry

39 Shipping

12

Liquid petroleum gas tankers

By Syd Heal

On the cover: Ledcor’s Storm Fury (photo: Dave Roels — www.daveroels.com); above: Harken Towing tugs on the Fraser River (Photo courtesy Harken Towing) ; right: Robert Allan Ltd.’s RAmora 2400 (image courtesy Robert Allan Ltd.); left: Mark Houghton (photo: Dave Roels — www.daveroels.com).

December 2015/January 2016 BC Shipping News 5

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6 BC Shipping News December 2015/January 2016

International Sailor’s Society Canada Vancouver Transportation Club

EDITOR’S NOTE Photos by Dave Roels, www.daveroels.com

It’s not just about the vessels

W

elcome to the December issue of BC Shipping News and our annual tug and towboat activity update. Our Industry Insight features Mark Houghton, COO, Ledcor Resources & Transportation, Marine Division, and the fast-growing Ledcor fleet of tugs and barges; Ray Dykes paints a picture of “cautious optimism” for tug companies in his industry update (and while he couldn’t get to everyone, he’s done a good job illustrating the health of the industry); Bureau Veritas gave a great

presentation on developments in the towing and coastal shipping industry; Saam Smit Towage Canada launched the new SST Capilano from ABD Boats; and Robert Allan Ltd. has announced a revolutionary new autonomous tug (seriously, check this out — page 33).

While our stories focus extensively on the tug industry — the companies, the growth of fleets, the technology that is changing the industry, and the pursuit of potential new opportunities like LNG terminal services — I found our coverage

to be lacking in one critical area: the guys operating the tugs!

While it’s easy to get carried away with the issues, the technology and the companies, the Masters, mates, deckhands and those who support them are the real key to this industry.

Thanks to photographer Dave Roels, who has been doing a remarkable job of documenting life on a tug, we’re pleased to dedicate this page to the tug crews.

They are, after all, the face of the industry.

— Jane McIvor

The faces of B.C. tugs...with Dave Roels

December 2015/January 2016 BC Shipping News 7

INDUSTRY TRAFFIC

Photo courtesy Port Metro Vancouver

Port Metro Vancouver donates specialized infrared camera to North Shore Rescue

Nigel S. Greenwood

MA, BSc, Master Mariner, FRIN, MNI Rear-Admiral, RCN (Ret’d)

www.greenwoodmaritime.com nsg@greenwoodmaritime.com / 250-507-8445

maritime and commercial law on canada’s west coast Nevin Fishman David K. Jones Connie Risi Michael M. Soltynski

W. Gary Wharton Catherine A. Hofmann David S. Jarrett Megan Nicholls

Peter Swanson Tom Beasley Russell Robertson

Thomas S. Hawkins Katherine A. Arnold Joanna R. Dawson

associate counsel: Lorna Pawluk tel: 6 0 4.681.1700 fax: 604.681.1788 emergency response: 6 0 4 . 6 8 1 . 1 7 0 0 address: 1500–570 Granville Street, Vancouver, BC, Canada, V6C 3P1 web: www.bernardllp.ca

8 BC Shipping News December 2015/January 2016

P

ort Metro Vancouver has donated a specialized infrared camera to North Shore Rescue. When required by North Shore Rescue, the camera will be mounted to a helicopter and used as a tool to help locate missing people in challenging terrain.

The camera, a SeaFlir II-C stabilized imaging system, utilizes FLIR (forward looking infrared radiometer) technology to locate the heat of an object or person.

The technology can be very effective when a direct line of sight may not be possible. The specialized camera has the ability to lock onto a heat source and track it for extended periods of time.

“This camera was used by our operations crews to maintain the safe, secure, efficient and reliable movement of marine traffic and cargo within Port Metro Vancouver’s jurisdiction,” said Peter Xotta, Port Metro Vancouver’s Vice President of Planning and Operations. “As we have recently purchased new patrol boats already outfitted with similar technology, we are delighted to support North Shore Rescue by donating what remains a very useful tool.”

The steep, tree-dense terrain of the North Shore Mountains, where North Shore Rescue primarily operates, can make it very difficult to locate lost or injured people.

“The North Shore Rescue team assists the police, fire and ambulance service with mountain search and rescue, helicopter rescue and urban search and rescue. North Shore Rescue members are frequently called out to look for lost or missing subjects that are located in challenging mountainous terrain,” said Jim Loree, North Shore Rescue. “The heat locating abilities of the FLIR camera will give the search crews an added advantage of being able to locate a subject without relying exclusively on the human eye.”

In 2014, Port Metro Vancouver unveiled two new patrol vessels and other operations and security assets. The vessels provide marine surveillance, early incident detection and activity tracking, and are equipped with two new FLIR cameras with thermal and night vision capabilities.

North Shore Rescue expects to have the camera in operation by January 2016.

NEWS BRIEFS

Mark Darley assumes role as Lloyd’s Register Americas Regional Marine Manager

E

xperienced marine leader Mark Darley recently assumed the role of Americas Regional Marine Manager and President of Lloyd’s Register North America (LRNA).

In these positions, he leads the company’s marine business for the Americas region, overseeing commercial and business planning and developing strategy to improve the company’s competitive position within the region. He co-ordinates with the Marine Group in London and is responsible for achieving operational goals for safety, quality and financial performance in the Americas.

“I have spent the last few weeks understanding more about our people and meeting our clients across the Americas.

It is clear to me that we have a worldclass team internally as well as great potential to build on and grow our relationships and services to clients within

the region,” said Darley. “Besides our core classification business, we are dedicated to supporting the development of new technologies and innovations that will play a vital role in the immediate and long-term future of shipping throughout the Americas. My focus is to ensure that Lloyd’s Register Americas meets or exceeds our client’s expectations with service innovation and operational excellence in a way more strategically aligned to our clients’ current and future business challenges.”

Before assuming his present position, Darley had been with Lloyd’s Register for the last 15 years in various operational and business roles. He has served in a wide variety of leadership positions within LR to include positions in the United Kingdom, Middle East and Asia.

Most recently, Darley led the South Asia Area.

He assumed the position from Tim Protheroe, who will continue as the Operations Director for the Lloyd’s Register Americas region.

Darley graduated from the University of Strathclyde, Glasgow, United Kingdom with a First Class Honours degree in Naval Architecture and Offshore Engineering.

December 2015/January 2016 BC Shipping News 9

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New memoir of West Bay founder released

W

hen Ben Vermeulen arrived in Vancouver in 1959, he had $52 in his pocket and a compelling ambition to succeed. At what, he didn’t quite know: his severe dyslexia was undiagnosed but had played havoc with his schooling. Nevertheless, his ability to work with his hands, problem solve and design complicated machinery in his head and then in actuality led him to becoming a steel fabricator in short order.

In his newly released memoir, Before I Forget, co-authored with well-known marine writer Marianne Scott, Vermeulen relates his life story with verve and wit.

From his childhood in the Netherlands during the Second World War to his emigration to Canada and the launch of the first West Bay yacht in 1969, he tells his life story with humour, revealing both his successes and failures, including his hooky playing, youthful pranks and some of the crazy risks he took as a young man.

His story is the quintessential immigrant, rags-to-riches tale.

In this memoir, it becomes clear that Vermeulen’s early years, often filled with fear and hunger, his failure at school and the compensation — developing his mechanical and design skills — have shaped his character, taught him to work hard, and led to great success.

NEWS BRIEFS ClassNK starts verification tests of next-generation condition-based engine monitoring system

L

eading classification society ClassNK (Chairman and President: Noboru Ueda) has commenced actual verification tests of its next-generation condition-based monitoring (CBM) system ClassNK CMAXS e-GICSX for Mitsui’s MAN B&W engines. The system is being jointly developed by ClassNK, Mitsui Engineering & Shipbuilding Co., Ltd., and MES Technoservice Co., Ltd. and the verification test is being conducted on a MOL-managed vessel with the co-operation of Mitsui O.S.K. Lines.

The system is unlike any other CBM system to date. Based on voyage data, including weather and sea condition, and machinery data collected from multiple sensors installed on the engine, ClassNK CMAXS e-GICSX can detect machinery abnormalities and, based on abnormality detection results, provide troubleshooting that can be accessed on board even without an internet connection.

ClassNK CMAXS e-GICSX uses a sophisticated algorithm to analyze correlations between multiple sensing data. Through the use of this algorithm, precise abnormality detection is carried out based on voyage data and large amounts of data collected from the electronically controlled diesel engines. A total of three vessels from shipping companies including MOL Group have been installed with ClassNK CMAXS e-GICSX and the effectiveness of the abnormality detection results and troubleshooting function will be verified. The verification test will go on until spring 2016.

ClassNK was awarded the Innovation Award from Lloyd’s List Asia Awards 2015.

ClassNK picked up the award for its 3D modelling software, ClassNK-PEERLESS, a comprehensive and powerful design

tool for 3D modelling that was developed using outcomes from joint R&D projects with the University of Tokyo, NYK Line, Mitsui O.S.K. Lines, “K” Line, Sasebo Heavy Industries, Sanwa Dock, MTI, S.E.A Systems, Armonicos, and ClassNK Consulting Service.

The software provides a solution to the ballast water management (BWM) system retrofit bottleneck following the anticipated entry into force of the BWM Convention. Whereas before it was necessary to enter the engine room and measure every structure manually, ClassNK-PEERLESS streamlines the process and eliminates the need for direct contact by using high-precision 3D laser scanners. Since its launch in 2014, ClassNK-PEERLESS has been used for retrofits on 27 vessels, saving roughly 8,000 man hours, translating into thousands of dollars in reduced labour costs.

December 2015/January 2016 BC Shipping News 11

INDUSTRY INSIGHT

The holistic approach Mark Houghton

Chief Operating Officer, Ledcor Resources & Transportation, Marine Division

Photo: Dave Roels (www.daveroels.com)

L

edcor’s entry into the marine transportation business four years ago was not just growth for growth’s sake. The synergies and vertical integration opportunities that came with the establishment of Ledcor’s Marine Division not only benefit the Ledcor Group but also their clients who gain significant advantages from this holistic approach.

As you’ll read from our interview with Mark Houghton, COO, Ledcor Resources & Transportation, Marine Division, expansion into the marine sector was an idea whose time had come. Demonstrating the values that are evident throughout the Ledcor Group — safety, environmental stewardship and long-term sustainability — Mark’s leadership of the Marine Division positions Ledcor as the company to watch for stellar growth.

BCSN: I think we should start with a quick overview of the Ledcor brand. Could you provide some history on its evolution and some context about where the Marine Division fits?

MH: Ledcor’s roots date back to 1947 when Bill Lede started Leduc Construction in Alberta to build roads and highways to support the expansion of the resource industry, utility companies, and, by 1970, pipelines. Bill was

Demonstrating the values that are evident throughout the Ledcor Group...Mark’s leadership of the Marine Division positions Ledcor as the company to watch for stellar growth. succeeded by his sons, Dave and Cliff, in 1980. While still a shareholder, Cliff has left the full-time leadership of the company to Dave.

Today, the Ledcor Group’s head office in British Columbia manages operations across North America. These operations include services in Building, Communications, Environmental, Forestry, Infrastructure, Mining, Oil & Gas, Power, Properties, and Transportation.

We have over 7,000 employees and 20 offices throughout North America. It’s a privately held company, so we’re not just employees; we’re stakeholders and have a vested interest in the success of the company.

A big part of Ledcor’s success is in the vertical integration of services from the different divisions. For example, the Construction Division builds a lot of the high-rises across Canada and the U.S. and often involves divisions like Ledcor Technical Services (LTS)

12 BC Shipping News December 2015/January 2016

to install fibre optics. Or, our Pipeline Division will use LTS to lay fibre optic cable along the utility corridor that is put in at the same time as the pipeline. We’re always looking for opportunities to integrate our various suites of services.

BCSN: Now what about the Marine Division? What was the motivation behind establishing Ledcor in this sector?

MH: The Marine Division falls under Ledcor Resources & Transportation and is led by President Paul McElligott. This Division also includes Forestry, Aviation and Trucking. The Forestry Group, the Trucking Group and the Marine Group are connected to a great degree. For example, our Forestry Group will harvest low grade wood and we’ll use our Trucking Division to transport the logs to our mill in Chilliwack that produces cants which are then packaged into containers and exported to China.

The by-product of wood chips and biomass is trucked from our mill to our

INDUSTRY INSIGHT Photo: Dave Roels (www.daveroels.com)

reload facility in Silverdale, Mission, and Ledcor Marine tugs then barge the product to Howe Sound Pulp and Paper with whom we have a contract to supply the fibre for their pulp and paper and power generation operations. On the return trip, we’ll pick up empty barges and bring them back to another site. It’s a constant exchange of full and empty barges going back and forth from Silverdale, Howe Sound and other sites.

We’ve been growing the Marine Division with contracts for companies like Lehigh and Lafarge to move aggregate and cement. We have another longterm contract starting in the new year with Mainland Sand & Gravel.

BCSN: Could you describe the assets you have in the Marine Division?

MH: We started building chip barges which were delivered in late 2011 and went into service in 2012. Those barges were built to support a long-term contract with Howe Sound Pulp and Paper.

We also acquired tugs to tow the barges.

When I joined in September 2013, we had six tugs and 12 chip barges — five are towing tugs that operate out of the Fraser River and we have one tug in Victoria for harbour assist to ships visiting the operations of Lehigh and Lafarge.

Today, we have 23 barges — the 12 original chip barges plus another six which were delivered this past July from Shanghai; two new 80-metre flat-deck cargo barges; and three additional previously owned barges. Of the 23 barges, 20 have been built in the last four years.

Of the tugs, six were existing tugs that we purchased from other companies, and we took delivery of the new Bill L Ledcor in February this year from China, built by the Damen Group. We have another two tugs under construction at Bracewell Marine Group in Richmond, B.C. set to be delivered before the end of 2015. That will bring us to nine tugs in the Ledcor fleet.

The six existing tugs are dedicated and designed to work on the Fraser River where you need a relatively short-length boat with a water draft less than 10 feet because of tidal action and river depths.

They have relatively low horsepower (three with 800 hp, two with 1,200 and the sixth with 1,600 hp) but are wellsuited for their purpose of towing commodities like gravel, aggregates, and wood products. The new tugs have horsepower between 1,200 and 1,340.

BCSN: Could you comment on your decision-making process between building locally versus offshore?

Mark Hougton with Dave Lede, CEO, Ledcor Group; MLA Naomi Yamamoto, BC Minister of State for Small Business; Paul McElligot, President, Ledcor Transportation and Resources; and Reverend John Eason, Mission to Seafarers during the christening ceremony of the Bill L Ledcor in March 2015.

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December 2015/January 2016 BC Shipping News 13

Photo: Dave Roels (www.daveroels.com)

INDUSTRY INSIGHT

The Storm Titan (atop Ledcor Barge 6001) is pushed by Ledcor tugs to Meridian Marine’s docks for some work.

MH: There’s two pieces to that. If you’re building a barge, which is a very simple structure — boxlike and a lot of flat steel — it’s divided up into blocks so you can have different work sites and put more people on it to reduce the time it takes

to build. There was a lack of capacity in British Columbia so we went to China for our barges. They’re using state-of-the-art equipment and their manufacturing and steel joining processes are world class.

So they can build barges quickly and

efficiently and, even with transportation costs, a 25 per cent duty on imported vessels, GST and PST, and sending our own project managers to oversee construction, it’s still about 40 per cent less than the cost of building here. Regardless of the costs however, no one here is building barges of the size we required.

Tugboats are different. They’re small, have curved hulls and all kinds of systems like propulsion, electrical power generation, piping, bridge navigation, etc.

You can’t put a lot of people inside like a barge so your labour efficiencies aren’t there. Costs might be lower in China but you don’t get the economies of scale.

Building a steel structure is one thing but installing the systems requires a refined set of skills.

For the Chinese-built tug we purchased from Damen, once we factored in all of the transport costs and duties, it was going to cost about the same if we built it here — and I say that with confidence because we have two tugs under construction with Bracewell Marine Group — but delivery time was much faster. We found that tug in May 2014, and they delivered it to us

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14 BC Shipping News December 2015/January 2016

complete in June 2014. The only reason we didn’t get it sooner was because we were waiting for two new barges to be finished so we could transport them all at the same time.

In Canada, it takes 18 months to two years to build a tug. In China, they build a lot of these tugs in advance. They’ll build the hull and then when the order comes in, different options and features can be added so you’re able to customize it to fit your own needs. For our purposes, we needed a tug quickly — we were chartering vessels and paying a lot of money and we were able to get that tug delivered one year sooner than if we built it here. That’s not the case for all tugs — it depends a lot on the size and complexity of the tug — but for our purposes, it worked well.

BCSN: Turning now to look at your operations in more detail, let’s start with staff.

How many staff do you currently have? And further, are your labour demands being met?

MH: Our total staff is 58 — 45 shipboard positions, four support positions and nine management and administration staff.

In the marine industry in general, it’s always difficult to get a supply of qualified mariners. There are challenges but we’re fortunate, we have a much younger workforce than is typical for tug companies on the coast. We have a good working relationship with our union which has attracted new members and is flexible in the unique needs in our industry.

Our average workforce age of deckhands, mates and captains is around the 35-to-38 range. We have a lot of crew in their 20s and 30s but we also have some older crew who provide stability and experience.

We pull crew from three sources: 1) we’ll try to promote from within, so we try to bring in the right people and help them advance from deckhand to mate to master — when we have a master position come open, we want to fill it from within the company so the job we will post is for a deckhand; 2) we have a great relationship with BCIT (including a scholarship program) — they have a good alumni network to advertise through; and 3) we’ll select qualified mariners from the open market.

Our pay is very competitive — we pay equal to or greater than the straighttime hourly rate of anyone else in the harbour or Fraser River. So in terms of supply and demand, there is a lot of traction at Ledcor. Another attraction with

December 2015/January 2016 BC Shipping News 15

INDUSTRY INSIGHT

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16 BC Shipping News December 2015/January 2016

Ledcor is that you have an opportunity to work on brand new equipment.

BCSN: You mentioned a scholarship program through BCIT. Could you explain that in more detail?

MH: It’s more important than ever to have institutions like BCIT on the West Coast. I wish there were more schools turning out Transport Canada-qualified candidates because it takes a long time to get the training. For example, for the deckhand position, it’s a 12-week academic training program, then 480 hours of sea time (so another six months realistically). In total, it takes nine months just to be a deckhand; to become a mate is a couple more years; and then to become a captain is another three. The training is rigorous and the commitment is significant.

We have a scholarship program to support deckhands through BCIT’s Bridge Watchman Program. It helps pay for their tuition fees and we offer them a billet on a vessel to satisfy the requirement for 480 hours of basic observing time on a marine platform. We then provide them with a letter to document that they’ve completed the requirements and we’ll submit that to Transport Canada. Once they obtain their Bridge Watchman certificate, we’ll hire them as a deckhand. This program was initiated within the last year and it’s proving to be effective.

BCSN: What about additional training? What sort of in-house programs does Ledcor offer?

MH: In addition to the Transport Canada certification training that’s provided by BCIT, we have a whole suite of in-house training programs. A lot of it is online through our Intranet and our vessel computers are able to access the network through cellular uplinks. We have a number of self-taught course modules on things like hazardous material awareness training, first aid training, accident investigation, and incident command structure to name just a few.

We also have a marine-specific set of mentor training and performance metrics. We have in-house standard operating procedures and protocols that mitigate risk and provide for safe operations. All the candidates in our marine program have to go through the formal training protocol and, in the case of mate to master, for example, one of the requirements is to be evaluated by three different masters on three different occasions and on three different vessels. It’s only when we get three positive evaluations that the candidate achieves his/her in-house credentials. The evaluations are based on the specific training for our vessels.

A priority in our training curriculum is the strong emphasis we place on safety. It’s not just a slogan for us, it’s a way of life and business management that applies to the entire Ledcor Group. The same applies to environmental sustainability. It’s part of the Ledcor mission statement and means we’re not making short-term decisions to the detriment of long-term integrity of our natural resources — whether that means forestry, mining or water.

BCSN: Could you describe your efforts for environmental sustainability in the context of your marine operations?

MH: We’re very cognizant of the water as a natural resource and pollution is simply not acceptable. We have a zero-oildischarge policy. One of the most environmentally sensitive aspects of our operations is the loading of diesel fuel so we have very stringent procedures and training for all of our mariners involved. For the two years I’ve been here, we’ve had zero spills.

We are testing the Green Marine program, performing all of the activities they recommend. We have a fully developed

INDUSTRY INSIGHT Photo: Dave Roels (www.daveroels.com)

recycling program onboard, all garbage is segregated and waste is minimized.

We employ a fuel conservation program which minimizes air emissions. In the future we will also be going after our ISO 14001 certification.

To give an example of a proactive initiative, we use flow scan meters on all of the fuel systems on our tugs so we can obtain a digital reading of how many litres of fuel per hour we’re burning. We have a gain-sharing program with our mariners — we know how much fuel we burn on average as a fleet and we put that benchmark out to the employees and encourage them to work as a team with our dispatchers to save fuel but still maintain their on-time delivery commitment to our customers. By using the meters, they’re able to determine a speed that will get them to a location on time but without burning more fuel than is necessary. If you push the throttles all the way to 100 per cent, and then pull them back and see how much the fuel consumption decreases, there is about a 10 per cent plus or minus zone where you

The Bill L Ledcor touches West Coast water for the first time during the launch ceremony in March 2015.

can pull back with no degradation in speed. That ‘sweet spot’ will change depending on the weather, the tides, currents, the load on the barge and the tug that you are towing with. Once the operator finds the fuel-efficient zone

ECDIS

Electronic Chart Display

and Information System

and remains there, there is significant reduction in fuel consumption.

In addition to seeing benefits to the environment by burning less fuel this way, our new tugs are all using Caterpillar engines — the C-18 model which is IMO

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December 2015/January 2016 BC Shipping News 17

INDUSTRY INSIGHT While our goal is to continue to look at every business segment within the marine sector and assess whether or not it’s attractive to us in terms of our strategy for growth, we’re definitely looking at getting involved in the LNG marine transportation sector.

Tier 2 compliant. They are the most fuelefficient engines operating in the industry today.

Maintenance is also a big part of our efforts. We have a big advantage with the equipment on the three new vessels with the Caterpillar engines. They feature electronic control modules that give readings on everything from fuel consumption to the operating parameters of the engine, making maintenance and trouble-shooting a lot easier. If there is a problem, an adjustment can be made before the equipment fails, so it’s very efficient. We also use nozzles with the

BRACEWELL

propellers for all the new vessels and the vast majority of the older ones. The nozzles concentrate the thrust of the water as the propeller turns and creates more thrust and bollard pull as compared to a conventional open wheel (propeller) tugboat.

BCSN: I’d like to spend the last few minutes looking at trends within the industries you serve — what are the main growth areas? And more specifically, what are Ledcor’s plans for future expansion?

MH: We’re seeing consistent but moderate growth and demand for tug services. As I mentioned earlier, one

means BUILT WELL

TraveLift: vessels to 220 tons / 30-ft beam

New Builds l Yard Services l Millwork l CSI l Repower Refits l Machine Shop l Painting l Sandblasting l Metallizing T: 604-821-1890 info@bracewellmarinegroup.com www.bracewellmarinegroup.com 18 BC Shipping News December 2015/January 2016

of the advantages we have within the suite of activities under the Ledcor banner is vertical integration of services.

For example, the Ledcor Construction group won a contract for Tsawwassen Mills Mall, a job required over 300,000 tonnes of aggregate. We were able to provide the full supply chain management to get that aggregate from Mainland Sand & Gravel and bring it to the Ledcor Construction job site. This is an example of how we can provide a suite of services offering the customer a turn-key solution.

Development of an LNG industry on the West Coast of British Columbia is a potential growth area everyone’s watching.

While our goal is to continue to look at every business segment within the marine sector and assess whether or not it’s attractive to us in terms of our strategy for growth, we’re definitely looking at getting involved in the LNG marine transportation sector. That’s an area where we think there is a lot of potential.

We have a whole suite of vertically integrated activities that can play to our advantage in the LNG industry. Our Contractors Division, for example, has already done work for big companies to move earth and level land to prepare sites for industrial facilities. Our Industrial Division specializes in pre-fabrication of buildings and manufacturing facilities which we can manufacture onsite or offsite and transport them in. Our Pipeline Division is well suited for liquefaction plants as well as the pipelines that will have to be built for product distribution to many different locations. Along with that, Ledcor Tehcnical Services can lay fibre optic cable along the accompanying utility corridor for communications and pipeline monitoring systems at the same time.

On the marine end, there is the landwater interface. We envision that we could supply the build-outs development of those facilities on the marineshore interface which is principally why we built the two new 80-metre deck cargo barges — they are project barges that can transport large quantities of stones and armour rock to build breakwaters, aggregate to create the base for the facilities, pre-fabircated plant modules, or even transport containers — there’s really nothing that we can’t move.

Then, once these facilities are built and the pipelines are supplying the gas, there’s the requirement for escort tugs

INDUSTRY INSIGHT

About Mark Houghton

Photo: Dave Roels (www.daveroels.com)

to assist in the safe navigation of tankers through Douglas Channel. And in addition to dedicated escort tugs, we’d need another set of tugs that are specialized for docking. These could also be used for firefighting or emergency response contingencies.

Overall, we think marine transportation is a good sector with potential for growth. While we do look at all segments of marine transportation, we don’t want to be all things to all people.

We focus on the activities where we can be competitive — areas that are profitable, provide value for our customers and can be done safely and with sustainability and environmental stewardship in mind.

We believe in sustainability — sustainable growth and sustainable employment. We’re not in it to make a quick buck and then bail out — that’s why we tend to go with long-term contracts — we partner with our clients and want a long-term business relationship

The Storm Fury picks up a barge-load of gravel from Mainland Sand & Gravel’s Cox Station Quarry.

with them. Partnering with our clients is not just a slogan, it’s the way Ledcor does business.

The Ledcor name is not just a brand.

It has corporate values and deliverables

Mark Houghton, as Chief Operating Officer of Ledcor Marine, provides leadership for 55 division employees and oversees the current fleet of nine tugs (two still under construction) and 23 barges.

Mark joined Ledcor Resources & Transportation in September 2013, having previously worked at Seaspan, where he held the position of Vice President, Marine Operations. Leading a team of over 400 employees in both marine and managerial roles, Mark had responsibility for the effective operations of 38 tugs and 120 barges as well as the supervision and P&L oversight of four commercial lines of business.

A professional with over 33 years of marine transportation experience, Mark has occupied a wide range of technical, operational and managerial positions, including Director of Shipyard Operations, Director of Sales, Ocean Towing (Foss Maritime Company) and Vice President, Maritime Operations (Hawaiian Tug & Barge, Young Brothers Ltd.).

Mark graduated with honours from the United States Merchant Marine Academy, receiving a Bachelor of Science in Marine Engineering and Nautical Science. He has previously held US Coast Guard Licenses as a Third Assistant Engineer and a Third Officer and obtained a Master’s Degree, Business Administration, from City University, Bellevue, Washington in 1996.

like environmental stewardship, sustainability, and absolute devotion to safety and risk mitigation. And it’s a great place to work where everyone has the same philosophy. BCSN

About Ledcor

L

edcor Group of Companies is an employee-owned, multi-disciplinary construction company in Canada and the United States, active in the construction of all types of buildings, civil (mining, dams, highways, bridges, pipeline), heavy industrial-petrochemical, oil/gas, forestry, mining, energy, utilities, transportation (marine, aviation & trucking) and telecommunications while building, installing, and servicing fibre optic cable on land and marine-submarine applications.

Ledcor Marine Division is a part of Ledcor Resources & Transportation Ltd. and owns and operates seven tugboats (with two more to be delivered at the end of 2015 for a total of nine) and 23 barges, making it one of the largest marine operations serving natural resources and industrial customers in Southwest British Columbia. Tugs are based in Richmond, B.C. in the North Arm of the Fraser River, with one vessel working full time in Victoria. Services include ship assist, barge and marine towing services and emergency marine services.

Currently, Ledcor’s Marine Division works in unison with their forestry operations to provide closed-loop supply chain services for the forestry industry. Their specially designed and constructed barges feature higher sides, which allow for high volume transport of fibre and other low-density materials. This allows for the transfer of fibre quickly and economically.

For more information, visit www.ledcor.com December 2015/January 2016 BC Shipping News 19

HISTORY LESSON Photo credit: Dave Roels (www.daveroels.com)

V

By Lea Edgar

Librarian/Archivist, Vancouver Maritime Museum

“The site on which the offices are located is one of historical value, for around it was built the City of Vancouver.” with the Royal City Planning Mills Company and the resulting company was called the B.C. Mills Timber and Trading Company. This company made its name with its patented system of prefabricated structures. These buildings were marketed to settlers allowing them to build a home quickly, easily, and inexpensively.

Some were even already painted! It was sort of like buying your home from Ikea.

A prime example of the quality of these pre-fab structures that B.C. Mills sold is our little building which became the company’s office, showroom, and sales centre in 1905. The building was designed

by Edward Caton Mahoney. The design proved to be much more weather resistant than other competing pre-fabs of the time. Each panel was insulated and joined together with weather-tight joints which were then bolted together. To contribute to the show-quality of this building, each room was paneled with a different type of BC wood such as balsam, hemlock, fir, and red cedar. Regrettably, all the different

Photo credit: Rick Horne

ancouver is not a city known for its built heritage. The city has a habit of tearing down the historic to accommodate the modern. Because of this, Vancouver carries with it a sense of constant newness. That is why it is so surprising to find a quaint little craftsman-style building adjacent to the stateof-the-art Centerm terminal. The little house-like structure is overshadowed by the massive cranes and innumerable containers of the bustling port. How did this structure survive over 100 years?

This is the history of a little building that persevered despite the relentless march of progress in the “forever new” city.

The original context of this building is the historic site of Hastings Mill. This busy economic centre was essential for Vancouver’s early lumber industry. The sawmill, located at the foot of Dunlevy Street, started in 1867. Around the sawmill grew a company town complete with a general store and school. Sadly, many of the original buildings did not survive the tragic fire of 1886. The one exception was the Hastings Mill Store, now located in Hastings Mill Park in Kitsilano. The Hastings Saw Mill Co. eventually merged

Abide with me: The story of the port’s little blue house

The Flying Angel Club, today’s home of the Mission to Seafarers at Vancouver’s docks.

20 BC Shipping News December 2015/January 2016

types of wood panels were painted over in the 1920s.

In 1925, the Vancouver Harbour Commissioners purchased the land that made up the former Hastings Mill site. They decided to retain the B.C. Mills building as an office and stated in their 1930 monthly report, “The site on which the offices are located is one of historical value, for around it was built the City of Vancouver.” Indeed, the B.C. Mills building is one of the only surviving structures associated with Hastings Mill. The Harbour Commissioners used the building from 1930 to 1936, and the successor organization— the National Harbours Board—also operated out of it from 1936 to 1973.

The current occupants of the building are the Mission to Seafarers, a Christian charity that serves merchant seamen around the world. In 1981, the building was sold to the organization by the National Harbours Board for one dollar. At that time the office building was converted into the “Flying Angels Club” and painted the distinctive Mission to Seafarers’ blue. One change to the building was the Port Manager’s office that was converted into a lounge. However, some original features are retained such as the brass fireplace. The original building also included a porte-cochère. Sadly, this was torn down due to substantial deterioration. Roughly in its place now is a monument dedicated to the history of the lumber industry in B.C. and the development of the city of Vancouver.

Another interesting feature of this building is the vault. Shown on the 1906 building plans, the original vault is three stories high—one vault per floor. It was converted in 1960 to double as a nuclear

VANCOUVER MARITIME MUSEUM

Hastings Mill ca. 1913. The BC Mills building can just be seen behind the Hastings Mill Store on the right.

fallout shelter. Included in the lower level of the shelter was a ventilation system, cold storage room, and escape hatch to the upper shelter. There is also some evidence to indicate that there may have been bunks. The first floor vault still houses multiple large wooden cabinets, likely used to store charts. These are just a few examples of the unique historical features of the Flying Angels Club building. Some new amenities offered at the club are a small shop, chapel, cyber café and billiards room. There are currently

three chaplains at the Mission and mass can be held either on board a ship or at the club.

The fact that this little building has survived largely untouched is a Vancouver miracle. It is especially surprising in that it resides on extremely valuable and commercially active land. Likely, its ideal location close to the port facilities and use largely as an administration building contributed to its preservation. The building has evolved from a show home to a home away from home for seamen.

Canada’s Pacific Gateways A new book by Dr. W.B.M. Hick Canada’s Pacific Gateways is a lavishly-illustrated chronicle of trade and development on the West Coast. It is a history of dreams and vision, of political will and, at times, political expediency. Dr. W.B.M. Hick delivers a lively account of the people — the visionaries, financiers, and workers — who built the ports at Vancouver and Prince Rupert and the vital transcontinental rail corridors that serve them.

The Mission to Seafarers organization is a most apt beneficiary of this unique heritage building. Surely, the charity will continue to serve the merchant seamen visiting Vancouver’s port for many years. And, with a bit of luck, the little blue building will remain as a memento of Hastings Mill, B.C.’s lumber industry, and the long history of a world-class port.

Lea Edgar started her position as Librarian/Archivist for the Vancouver Maritime Museum in July 2013. She can be contacted at archives@vancouvermaritimemuseum.com.

Marine paintings, special commissions, talks, reproductions and books...

John M. Horton, Marine Artist

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The Franklin Expedition’s HMS Erebus and Terror A British expedition led by Captain Sir John Franklin departed England in 1845 to explore and chart the last unnavigated part of the North West Passage and were last seen in Victoria Strait. Many expeditions have tried to find these ships, but it was not until fall 2014 that the Victoria Expedition found the wreck of HMS Erebus.

This painting was produced in honour of that discovery and shows the Erebus in the foreground and Terror in the background.

This painting is available for sale. Please contact us to find out which gallery currently has it on display.

(604) 943-4399 john@johnhorton.ca / www.johnhorton.ca

Untitled-1 1

2/7/2013 1:14:42 PM

December 2015/January 2016 BC Shipping News 21

MISSION TO SEAFARERS

Reverend Nick retires from the Mission

Located at Vancouver Waterfront and Roberts Bank

www.flyingangel.ca 22 BC Shipping News December 2015/January 2016

Photo: Dave Roels (www.daveroels.com)

R

everend Nick Parker’s role over the last nine years is a bit hard to pin down. Nick describes it as a “jack-of-all-trades” job but I hazard to say it’s even more than that. There is the obvious responsibility to address the needs of seafarers who visit our ports — dealing with inequities like repatriation or monetary issues and liaising with the International Transport Workers Federation for bigger problems; medical issues; delivering presents on Christmas Eve; church services; and, most of all, providing a warm atmosphere where sailors, regardless of faith, race or gender are guaranteed a friendly smile, a laugh with others or even a shoulder to cry on if needed.

Then there are, of course, all of the handyman chores required to maintain a 100-year-old building (and see Lea Edgar’s article on Page 20 for a fascinating look at the little blue house). Plus, there’s the day-to-day tasks of the business-end of the Mission — administrative duties, writing thank you letters, watching budgets, running board meetings.

Yet another important role under Nick’s job description is that of fundraiser. These are “fun events where it’s great to see the marine community come out and participate,” he said without mentioning the amount of time and effort it usually takes to organize events like Christmas at Sea, Cycling for Seafarers (which has raised over $300,000 for the Mission since Nick began it in his first year) or the Day of the Seafarer Fundraising Dinner.

Aside from all of the above and without a doubt, Reverend Nick will likely be best remembered for being the critical link between Vancouver’s marine community and the seafarers who call on our shores — he is our ambassador and it is this role he has performed most impressively.

Since Reverend Parker has announced his retirement from the Mission to Seafarers, set for the end of 2015, BC Shipping News — presumptuously on behalf of all of our readers — would like to extend a heartfelt thanks for his service.

Nick’s pet project has been Cycling for Seafarers , an annual event that has raised upwards of $300,000.

The road to the Mission

After Royal Military College and a degree from Trent University, Nick’s naval career brought him to the West Coast where he received his commission. “I think every ship I ever served on is now an artificial reef,” he said, “I’m not sure what that says about me…”

Following his naval career, Nick attended the University of Toronto’s School of Theology, and after obtaining his Masters in Divinity from Wycliffe College, he was ordained as a Deacon in May, 1983. His first posting was in Campbell River and then, once priested, he received his first parish in Port McNeill. As the only Anglican cleric north of Campbell River, he travelled much of the North Coast — as much as half of the area under the jurisdiction of the Diocese of British Columbia.

Next was a four-year tenure in Qualicum Beach followed by 10 years as the Dean of the Diocese of the Cariboo and Rector at St. Paul’s Cathedral. He recalls those years with a bittersweet fondness, noting a genuineness of faith amongst locals but also trying to rebuild relationships damaged by the revelation of systemic abuse in residential schools.

Reverend Parker joined the Mission to Seafarers following three and a half years of service at St. Stephens in West Vancouver.

My, how times have changed

Not only is the world of seafaring changing, the Mission of Seafarers as a global entity is undergoing a transition as well.

Where there used to be upwards of 32,000 sailors a year going through the Mission’s Vancouver and North Shore locations in

MISSION TO SEAFARERS

The way forward

As for the future, Reverend Parker believes that his departure provides an opportunity for the Mission Board to “change the model” and consider that perhaps the tools of the last century are not necessarily the tools that reflect the needs of today’s seafarer. “They need a safe haven,” he said. “The symbol of the Flying Angel is recognized by all seafarers and plays an important role in supporting those who are far from their families, sometimes in less than desirable conditions.”

Photos: Dave Roels (www.daveroels.com)

the 1970s, today, the Vancouver Mission sees about 4,000 visits and 15,000 at the Roberts Bank location (higher because of the distance and cost to travel to downtown). “There are less crew,” Nick says to explain in part the drop in numbers.

“Over the last three decades, I’d estimate a 50 to 70 per cent loss in numbers of crew due to automation. Even though we get about 3,000 ships every year in the port — and say an average of 20 crew aboard — between being on duty and catching up on sleep while off duty, only a portion will get off the ship and of those, only a small percentage will come to the Mission.”

In addition to lower numbers to start, the advent of smart phones and easier access to wi-fi spots downtown has reduced the demand for the Mission’s internet and phone service to connect with family members.

Nick cites another underlying reason: “The port of Vancouver and Canada have been eminently successful in making shipping a positive entity — we have good companies and good enforcement,” he said. “We have good ships, good sailors.

We are a very privileged port — we get very few derelict vessels and have very few large issues. This is unique to much of the shipping world. That’s not to say we still don’t have issues — there are deaths, suicides, repatriation issues and a host of other situations where we help, but we’ve discouraged bad ships and at the same time, done ourselves out of a job.”

Globally, the Mission to Seafarers has also undergone change in the last few years. Now organized into eight regions around the world, Canada, as one of those regions, operates as an autonomous entity. As Regional Director, Nick has just wrapped up meetings in Halifax earlier this year to formalize the constitution and bylaws with the next step being to incorporate and register as a charity.

Vancouver’s local marine community, like Tymac Launch Service, pitch in to help Reverend Nick deliver gifts to seafarers at Christmas.

Seafarers appreciate the gifts brought by Reverend Nick during the Christmas as Sea initiative.

He has also noticed a change in Vancouver’s shipping community. “Sea captains who came ashore 20 or 30 years ago to fill the executive positions in Vancouver’s industry are now retiring and being replaced by people who have never gone to sea and who have never utilized Missions around the globe.

As a result, there’s a tendency to look at the sea as a business rather than with a familiarity of what both the seafarers go through and what it means to have support from the community.”

Asked whether he had advice for his successor, not yet named at the time of printing, Nick notes that the job is “as it was in the beginning — all about relationships. It’s about visiting the ships, meeting the sailors, laughing and crying with them. People respond to that. I’m not even sure they want the facilities but they definitely want the face. Other than

the pilots, the Mission Chaplain is one of the few people the sailors will meet and it’s important to set the tone for their perception of Canada.”

Nick’s last official duty is to deliver presents to seafarers on ships on Christmas Eve. Following a holiday with his wife Sandi and adult children Andrea, Colin, Ben and Stephen, Nick will spend his remaining years of ministry service in Squamish. “It was my first calling,” he explains of his choice to work as a parttime cleric. “Smaller towns will usually only see new clerics fresh out of college.

For me, it’s a chance to go back to a place that gave me a start and give them the benefit of my experience.”

Nick, on behalf of the maritime community which you have served so faithfully, BC Shipping News would like to extend our thanks and best wishes on a happy future. BCSN

December 2015/January 2016 BC Shipping News 23

SS BEAVER AWARDS SS Beaver Awards

Recipients recognized for contributions to maritime industry

Captain Ronald Burchett

The Burchett name has featured prominently in B.C.’s marine community for over 70 years. As son of Arthur and father to Shawn, Ron’s career in the marine industry includes such recognized companies as Rivtow, Matsumoto Shipyards, Vancouver Shipyards and Burrard Yarrows to name just a few. By the end of the 1970s, he was working with the Central Native Co-op in Ucluelet to build an aluminum fish-processing system; following this, he designed a new series of fish boats with the team at Allied Shipyards; and then became best known as a master of innovation with dynamic working model boats.

Photos: BC Shipping News

T

he Maritime Museum of BC added another four names to their list of industry leaders who have significantly contributed to the maritime industry in British Columbia. In a ceremony in mid-October at the Vancouver Maritime Museum, MMBC’s Past President Jan Drent and the Honourable Judith Guichon, Lieutenant Governor of British Columbia, awarded the SS Beaver Medal for Maritime Excellence to Captain Ronald Burchett, Helmut Lanziner, Sydney Heal and the Pacific Pilotage Authority. With family, friends and industry colleagues in attendance, each were presented with a medal fashioned from brass and copper salvaged from the SS Beaver, the first steamship to operate in the Pacific Northwest which, in 1888, ran aground on Siwash Rock in Vancouver’s Harbour.

“This is the fourth year that MMBC has been involved in running a selection process to identify B.C. individuals who have done remarkable things in and around the water,” said Drent who noted that past recipients included such industry leaders as Robert Allan, Peter Bernard, Dennis Washington, Malcolm Barker and Dr. William Hick — each with an impressive list of accomplishments that were instrumental in developing and advancing B.C.’s maritime industry.

On behalf of BC Shipping News, congratulations to the following 2015 winners of the SS Beaver Award!

Left to right: Captain Kevin Obermeyer accepting the SS Beaver Award on behalf of the Pacific Pilotage Authority; the Honourable Judith Guichon, Lieutenant Governor of British Columbia; Sydney Heal; Captain Ronal Burchett; and Helmut Lanziner.

The Maritime Museum of BC added another four names to their list of industry leaders who have significantly contributed to the maritime industry in British Columbia.

In a culmination of experience, starting from the age of six where he would sit for hours watching and learning from boat building legend John Hansen, through to building model tugs for Rivtow and then co-ordinating the model boat show at Expo 86, Ron is only one of two people in the world who currently builds dynamic working models of vessels including barges, tugs, fish boats and ferries. Working with Futaba, a Japanese firm known for designing and manufacturing hobbygrade radio control systems, Ron has built Voith-Schneider and Z-drives to scale for working models.

Ron also collaborated with Robert Allan Ltd. to build the BRAtt (Burchett Robert Allan Training Tug), a quarterscale training tug to addresses the paradox of Canadian regulations that require certification for operating a full-size tug but few opportunities to get the training that would provide for the certification.

24 BC Shipping News December 2015/January 2016

Ron was also key in the development of lithium batteries as part of B.C.-based Corvus Energy Ltd. Corvus has gone from a marine-focused company supplying batteries for hybrid tugs to one with feasible uses in numerous applications spanning a diverse spectrum of industries.

SS BEAVER AWARDS Sydney Heal

Mr. Heal’s maritime career spans close to 75 years, starting in England when he joined the Thames & Mersey Marine Insurance Company and then volunteering for the Royal Navy in the Second World War. Since emigrating to Vancouver in 1952, Heal spent a career in the marine insurance sector as well as in various barge, water taxi and marine operating ventures, including the real estate business specializing in coastal properties and the aquaculture industry.

In 1991, after retiring from the industry at age 65, Syd established Cordillera Books, a maritime book publishing company and post-retirement project. He has published more than 60 books, including 25 written by him. The most recent book, published this year, details the career of Alan Meadows of Marine Link Transportation, owner of the Aurora Explorer, another unique vessel on B.C.’s coast.

A notable credit to Heal’s contributions to the industry at that time came in 1962 when he saved the SS Master from being scrapped. Today, the Master is the sole remaining steam tug built by Arthur Moscrop that has been maintained in her original design.

Heal is recognized as one of the “finest interpreters of the marine scene in British Columbia,” according to Nautitcapedia contributor John MacFarlane. “He leads the pack in his general commercial knowledge, not only historically but also in a far broader field from marine insurance and finance through to practical ship economics and operations!”

He has also been a contributing writer for numerous maritime and fish farming journals and continues to provide regular submissions for BC Shipping News.

Helmut Lanziner

Internationally recognized as the father of what is now known as ECDIS (Electronic Chart Display and Information System), Helmut Lanziner is credited with making what is likely the single largest advance in marine navigation since radar. As a pioneer in the field of positioning systems and electronic charting, North Vancouver-based Lanziner has already received the Order of Canada, Transport Canada’s 2005 Marine Safety Award, and the Queen Elizabeth II Diamond Jubilee Medal in recognition of his ground-breaking work. He was also a part of the Canadian delegation to the International Maritime Organization to deal with electronic chart-related issues.

For over 40 years, Lanziner has been at the forefront of positioning and navigation technology — he began working on positioning systems as early as the 1970s and supplied the first self-contained operational electronic chart system (PNS, or Precise Navigation Systems) for six offshore supply vessels and dedicated icebreakers in the Canadian Arctic.

He went on to develop PINS, or Precise Integrated Navigation Systems, and then further developed PINS to include radar information and other sensor integration in ECPINS, or Electronic Chart Precise Integrated Navigation System.

Lanziner also developed radar image overlay to identify uncharted hazards relative to a ship’s own position. In 1989, while at Offshore Systems Ltd. — the company he founded (noting he has since moved on) — Lanziner undertook the first trials of RadarFix, a patented automatic radar positioning technology which can be used as a back-up system to address identified vulnerabilities in global positioning systems.

Pacific Pilotage Authority

As has become tradition, one Beaver Medal is awarded to a company or organization that exemplifies a continued high standard of excellence in operations and contributions to the B.C. marine industry. This year’s winner, the Pacific Pilotage Authority, was well represented with Captain Kevin Obermeyer accepting the award on the Authority’s behalf and past Chair Lorraine Cunningham as well as current Chair Peter Bernard in attendance.

The Pacific Pilotage Authority, one of four pilotage authorities across Canada that serve to ensure safe, reliable and efficient passage for international vessels of 350 gross tonnes and over while travelling in Canadian waters. Working with BC Coast Pilots Ltd., a private company that provides service to the Pacific Pilotage Authority in all coastal areas of British Columbia, and the Fraser River Pilots, employees of the PPA who are responsible for safe passage on the Fraser River, the Pacific Pilotage Authority governs the operations and services of pilots in more than 14,000 assignments per year conducted by over 110 pilots.

Pilots on the West Coast have an average safety performance of 99.98 per cent and is considered one of the most successful pilotage areas in the world. And with an area of jurisdiction that extends approximately two nautical miles from every major point of land in British Columbia and stretches from Alaska to Washington State, it is also one of the largest pilotage areas in the world.

December 2015/January 2016 BC Shipping News 25

TUGS AND TOWBOATS

Photo by Dave Roels, www.daveroels.com

Tug and towboat industry recovery tempered by losses

By Ray Dykes

M

ounting satisfaction gained from the slow but continuing recovery of the British Columbia tug and towboat industry has been sharply tempered by vessel losses this year.

As the year winds down and “cautious optimism” still prevails as it did a year ago, the sobering knowledge that six tugs or towboats sank during 2015 has prompted a round of self-analysis that can only help the industry as it looks more closely at maintenance and safety in what some see as an aging fleet.

Accidents happen in any industry and the consoling note this year has been that there was no loss of life and relatively few injuries. However, any tug or towboat loss starts the alarm bells ringing in the industry and 2015 is no different.

In fact, the year to date with two months to go already ranks as equal worst in recent memory with six tugs sunk and nine other accidents reported. In 2008, there were six tugs sunk and 18 shipping accidents.

For Captain Phillip Nelson, President of the Council of Marine Carriers, which represents about 30 B.C. tug and barge companies, the six tug sinkings were from different causes and “did not reflect poor vessel conditions, any apparent flaunting of regulations, or lack of vessel maintenance.

“They were all accidents more than anything else and there appeared to be no underlying cause, it’s just the way things go sometimes,” says Nelson.

Deadheads

Some of the tugs hit deadheads in the Fraser River and sank or were overrun by the barge they were towing. Three were overwhelmed by rough sea conditions in B.C.’s northern waters. In each case, “the

...any tug or towboat loss starts the alarm bells ringing in the industry and 2015 is no different. mariners were unbelievably lucky” to escape with their lives.

For his part, Nelson is concerned there is too little debris clearing being done in the North Arm of the Fraser River.

“Port Metro Vancouver is not doing the North Arm very well,” he says. “I have spoken to them on a couple of occasions, but they have done nothing to allay our fears.”

Captain Nelson says that Fraser River Pile & Dredge sent a survey vessel down the Fraser River with side-scan sonar and found the area around the north jetty “full of deadheads.” And he adds that “even the survey vessel hit something, the River a real mess.”

“Cautiously optimistic”

The man in charge of B.C.’s largest tug and towboat fleet, Jonathan Whitworth, CEO of Seaspan Marine, is deeply concerned by the spate of tug losses and sees it as a “dangerous warning sign” and a “wake-up call for the industry on what we should and shouldn’t be doing in training, crewing, and tug boat certification.”

Seaspan has a fleet of 33 tugs and 107 barges and Whitworth says he is “very worried about the industry’s safety record” and adds “this last year has been unbelievable.” No Seaspan boats were involved in the tug sinkings and safety is a critical part of the company’s three core values.

“We aim to make sure our employees are safe,” he adds. “We have the largest safety budget for safety programs and gear of anyone in Western Canada.”

With members in a wide diversity of marine roles, the Council of Marine Carriers and President Captain Nelson have seen the impact of the recession on the tug and towboat fleet over the past few years amid the oft-failing fortunes of the B.C. forestry industry.

He does blame the recent economic ups and downs for industry uncertainty, but “we haven’t heard that any companies are in any difficulty because of the economy, although some of them are not doing as well in their traditional business areas as they’d like.”

In log towing, a lot of non-aligned companies have been moving in and taking over that business sector, but neither that nor the economy are the biggest challenge facing the industry from his perspective.

Wake-up call

26 BC Shipping News December 2015/January 2016

Despite the tug boat losses, many tug owners and operators say 2014 and so far into 2015 the industry is “quite healthy,” as Erv Mihalicz, Manager of Operations at Catherwood Towing Ltd., put it. He was one of several tug companies that responded to our review request this year. The Council of Marine Carriers’ Captain Nelson says his reading of the industry is that it remains “cautiously optimistic” about the future, just as BC Shipping News reported in our annual tug and towboat review last year.

Here is our report from those we were able to contact for this year’s industry review.

Council overview

TUGS AND TOWBOATS Photo: Dave Roels (www.daveroels.com)

“Probably meeting the continuing need to diversify in their business is our members’ biggest challenge in this industry,” he says. “You can’t sit back on your haunches and feel set for life; you can’t relax, you have to look continually for new ways of doing business and meeting the needs of your customers in an innovative and economical manner.”

Depending on the economy, Nelson doesn’t see any great changes coming for the industry over the next couple of years.

Seaspan Marine

As the largest tug and towboat fleet operator in B.C. waters, as mentioned above, Seaspan Marine and CEO Whitworth found the last year “fairly good” for business. “We lost some and gained some,” was how he described 2014 and beyond.

There’s considerable anticipation of the new Liquefied Natural Gas (LNG) industry finally starting up in B.C. and the marine business that will bring in such areas as ship docking and vessel escort. “We are extremely eager to look

The Seaspan Kestrel.

at these opportunities up and down the B.C. coast,” Whitworth adds. Seaspan has some contracts already and is awaiting the Final Investment Decision (FID) to be made in several key projects.

Meanwhile, the company still has perhaps the second largest fleet in the province — made up entirely of idle tugs and tied up barges. At last count there were 14 tugs and 26 barges out of service.

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TUGS AND TOWBOATS

Photo courtesy Amix Group

Amix Group

The Amix Group’s General Jackson.

Some are destined for scrap, but Whitworth says Seaspan will wait until steel prices rebound from the current doldrums, more of the idle fleet will be sent straight to scrap.

In the last 12 months, Seaspan has added four large barges to its fleet — three secondhand out of Asia and a 16,000-deadweight-tonne new build from China. Whitworth sees the company’s major pluses as “our size, our quality, our attention to safety, and our environmental stewardship.”

ALLIED

SHIPBUILDERS Shipbuilders and Ship Repairers

Different to most other tug and towboat companies because of the comprehensive package it can offer — everything from barges to tug boats, heavy lift cranes to marine salvage, break bulk cargoes to transloading yachts and reloading cargoes — not much has changed over the past year at the Amix Group.

The Surrey-based company has kept fleet size about the same over the past year and has five operating tugs (another was sold and two others are tied up due to the high costs of having their Canadian Steamship Inspections renewed), four log-crane barges, eight deck barges, two crane barges, and even two submersibles. There are no planned acquisitions or new builds, says Amix President and part-owner Clarke Longmuir.

The difference maker for Amix is that it offers a full service tug, barge and crane package to handle any variation of cargo of almost any size.

As for new opportunities, Longmuir says Amix is “always exploring markets up and down the West Coast of North America.” And in the past year, the company increased its service to southern Oregon and has moved cargo as far north as Kodiak, Alaska.

Catherwood Towing Ltd.

Towing specialists, Catherwood is pondering whether to add another tug boat to its 12-vessel fleet next year after a “quite healthy” past year, says Manager of Operations, Erv Mihalicz.

But, that decision will be tempered no doubt by what he sees as the industry’s biggest challenge — “the lack of certified and appropriately experienced crews.”

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TUGS AND TOWBOATS Photo courtesy ITB Marine

Catherwood sold a small tug this year but Mihalicz doesn’t agree that there are too many boats and not enough work on the West Coast.

The company isn’t currently exploring any new market areas, but prides itself in being able to “provide quality and innovative marine transportation solutions that meet our customers’ time lines and at competitive rates.”

Harken Towing

It has been a slower year than normal for this Port Coquitlam-based, family-owned company which runs 15 tug boats — five continuously and 10 on shift work — plus seven deck barges. There have been no new builds, but over the past decade most of the fleet has had a refit says Captain John Mackenzie, Operations Manager.

When the construction industry does well, so does Harken Towing, as it largely moves aggregate and materials for the gravel industry on projects such as the new Port Mann Bridge. As Lower Mainland construction has slowed a little, the hopes ahead are for the emerging LNG industry and the announced bridge replacement of the George Massey Tunnel. Coastal logging is still important, but barge transport from the Fraser Surrey Docks expansion into coal handling seems to have faded away with the latest plan to bring Panamax vessels up the Fraser directly to the terminal.

Harken “never stops looking” for new business opportunities, says Mackenzie, and there’s talk of perhaps getting a second drive-on, drive-off ramp barge for moving materials.

Hodder

barges, plus three water taxis from its Richmond base on the North Arm of the Fraser River.

General Manager Chris Hodder says business has been up and down for the past few years as pulp and other exports slow down. He sees the biggest challenge facing the industry as “trying to keep our costs down for our customers and trying to provide good service for them so their inventory stays in one piece and gets to its destination.”

Asked if he thought there might be too many tug boats for too little business in the B.C. market, he replies: “Not too many boats, but maybe too many old boats and not enough new ones.” Barges are getting bigger and more tug boat horsepower is needed depending on the job, he added.

Photo courtesy Harken Towing

A specialist log towing firm, Hodder Tugboat Co. Ltd. operates 10 tugs and two

The Cindy Mozel and the Island Crown, part of ITB Marine’s fleet.

Hodder acquired two tugs in the past year, both of 1970s vintage, the River Rebel and the Rasp, which are proving handy additions for the business. With other tugs up to 1,400hp the company offers towing services anywhere from Washington to Alaska.

ITB Marine

The former Island Tug and Barge, now known as ITB Marine, has had a steady flow of work in all of the traditional sectors with “some performing better than others but generally not showing aggregate signs of growth or shrinkage overall,” says company President Bob Shields.

He sees the biggest challenge facing the industry as a “dysfunctional, cumbersome, and inefficient regulatory regime.”

Harken Towing’s fleet.

December 2015/January 2016 BC Shipping News 29

TUGS AND TOWBOATS In fact, Shields contends “Canada has fallen out of step with both the United States and international regulations, often times over-complicating something that is simple, or miss-applying international regulations to a domestic situation.”

Shields is also concerned that in the marine industry — both domestically and internationally — there always seems to be an oversupply of vessels and says that older vessels are not scrapped and “seem to be continuously repurposed.” As well, he contends that new construction continues “even at times when the market for these vessels is shrinking.”

ITB runs 15 vessels, including six tugs and six barges from its Richmond base and has two new vessels under construction to replace outdated boats. Shields says the company’s strengths are “based on a solid foundation of core values and a desire to excel in niche markets.”

barges within a year. The 1,200-horsepower tug, Bill L. Ledcor, and two new flat deck heavy cargo barges arrived from Shanghai in late February. Another six new barges arrived in July from China.

Ledcor also expects to receive delivery by the end of the year of two new 48-foot A.G. McIlwain-designed tugs built by Bracewell Marine Group. By then, it will have a fleet of nine tugs and 23 barges.

The new tugs and barges will mainly be used on the Fraser River to support Ledcor’s 10-year contract with Mainland Sand & Gravel which starts next year to deliver aggregate to various depots along the river.

Ledcor’s expansion will allow the company to diversify “to meet the needs of current and future clients,” notes Mark Houghton, the marine division’s Chief Operating Officer. Houghton and Ledcor are profiled in more detail on page 12 of this issue.

Continued rapid growth for Ledcor’s Marine Division saw three tugs and eight barges added to its fleet of six tugs and 15

In the eyes of Saam Smit Towage President Frans Tjallingii, the B.C. tug and towboat industry declined in 2014

Ledcor

Saam Smit Towage

as competition increased and commodity prices such as coal slumped. The challenge facing the industry is overcapacity and the difference between cost and quality levels among the players.

“This creates competition that is focused primarily on price differences between players and it will create adjustments in the market,” Tjallingii says. “In general, the fleet on this coast is old and will need investment for renewal. This means increased investment requirements at lower returns.”

Slow “one in, one out” fleet renewal is underway at Saam Smit Towage and Tjallingii says the moves are driven by vessel “end of life” and also the need for increased tug power. Last year, two 2009built tugs were brought in to replace Smit Skeena and Smit Nass, and in November 2015 the company took delivery of a 22-metre new build from ABD Shipyards with a second tug to follow next year.

Saam Smit Towage enjoys a strong presence in a number of ports along the B.C. coast and offers a “world-class service with industry-leading safety systems.” The company is keeping a close eye

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www.jotun.com 30 BC Shipping News December 2015/January 2016

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TUGS AND TOWBOATS

Squamish Marine

There are still a lot of logs moving up and down the B.C. coast and Squamish Marine Services Ltd. is maintaining its market share and keeping its customers happy, according to owner, Chris Tamburri.

He feels the biggest challenge for the tug and towboat industry is dealing with globalization of the local market “with more and more decisions being made offshore that affect us here.”

One niche market the company is pursuing is cleaning away derelict vessels in the Squamish Harbour, recycling as much as it can. Tamburri says there are at least two dozen more boats to go province-wide.

As well as its two tugs (a third was recently sold), Squamish Marine serves the Howe Sound with a water taxi, does small vessel marine repairs, and owns a local marina.

Photo: Dave Roels (www.daveroels.com)

on LNG developments and hopes “to be a provider of tug services” to some of the LNG projects.

Tymac Launch

The only company to respond that it had its best year ever last year, Tymac Launch Service Ltd. splits its business 50-50 between tug and barge work and four launches it uses as water taxis or on crew and pilot duties from ships in Vancouver and Prince Rupert.

Director of Marketing Steve Hnatko says the four-tug and eight-barge fleet, including four new barges added this past year, are moving waste from cruise ships and other bulk cargoes such as sludge and oil. They also carry a lot of fuel drums and barrels servicing vessels and even tanker trucks.

The new Tymac Tide built by the Sylte Shipyard could be followed by two more from the same builder, pending a decision to be made by the end of the year. The Tide, which was received last August, has been generating “quite a bit of work,” says Hnatko. It was meant to replace Tymac 20, a 1929-vintage wooden hull tug, but that vessel is still in service, perhaps for sentimental reasons as it’s the oldest wooden working tug around on the coast.

Asked why the company was doing so well in tough market times, Hnatko responds: “We’re always there for our customers and last year was our best year because of the level of service we offer.”

Ray Dykes is a journalist who has worked his way around the world as a writer / photographer. Ray can be reached at prplus@shaw.ca.

Showing off Saam Smit Towage Canada’s new colours, the Tiger Sun.

December 2015/January 2016 BC Shipping News 31

TUGS

Saam Smit Towage Canada Inc. launches new ASD tug Photo: Dave Roels (www.daveroels.com)

I

Staff from Saam Smit Towage Canada Inc. and Alan Dawson, ABD Boats, celebrate the launch of the SST Capilano.

“It is an honour to be able to acknowledge the contributions of Chief Capilano in this way and we will work hard to ensure the SST Capilano upholds our shared values.” of the vessel to SST. This versatile and manoeuvrable vessel will be added to SST’s local fleet of 21 tugs providing harbour towage and escort services along the coast of British Columbia. As part of

a joint venture that operates throughout the Americas, the SST Capilano is a welcome addition to a fleet of 100 tugs that showcase the latest in technology, power and capacity.

Specifications of the SST Capilano: • • • • • •

Photo: Dave Roels (www.daveroels.com)

n a fitting tribute to the renowned historic leader of the Squamish First Nation, Chief Joe Capilano, Saam Smit Towage Canada Inc. (SST) has named its newest tug SST Capilano. Also known as Joe Mathias, Chief Capilano was an early champion of native rights at the turn of the 20th century, first travelling to Ottawa with a contingent of chiefs from British Columbia to meet with Prime Minister Sir Wilfred Laurier and then continuing on to England to meet with King Edward VII. “We were looking for a strong name that illustrated the values of SST,” said Frans Tjallingii, President, Saam Smit Towage Canada. “Chief Capilano’s leadership, his commitment to the community he represented, and his unwavering dedication to the land of the North Shore and British Columbia are attributes we wanted to recognize. It is an honour to be able to acknowledge the contributions of Chief Capilano in this way and we will work hard to ensure the SST Capilano upholds our shared values.”

The new ASD tug, built by ABD Boats in North Vancouver, was launched in an informal, staff-only event, on the ancestral, traditional and unceded Aboriginal territories of the Squamish, TsleilWaututh and Musqueam First Nations.

A more formal inauguration ceremony will be held in early spring after delivery

32 BC Shipping News December 2015/January 2016

• • • • • • •

Length: 21.69m Breadth: 10.67m Depth Mld: 3.96m Gross Tons 198 Fuel Capacity: 36,368 L Power: 2 X MTU 16V4000M61, 2000 kW each (Supplied by Cullen) Bollard Pull: 65MT Auxiliaries: 2 X John Deere 4045 DMF, 40 kW (Supplied by Frontier) Drive Units: 2 X Rolls-Royce US20 FP Z-Drives (Supplied by Rolls Royce) Winch (fwd): DMT TW-H300KN, 180 MT braking power, 30 MT pulling power (Supplied by Holland) Towline: Amsteel Blue 200M X 64mm, 300MT breaking strain (Supplied by Redden Net) Class: Lloyds +100A1 Tug, Coastal Service, LMC, UMS Voyages: NC2

TUGS

Revolutionary RAmora brings tele-operated capability to ship handling As a result of research and development for over more than a year, Robert Allan Ltd. has announced its new autonomous tug concept, the RAmora.

Image courtesy Robert Allan Ltd.

I

magine the impact of a workboat designed to operate in hazardous environments, but without risk to crew. One that can fight a fire for extended periods and more closely than a conventional fire-fighting vessel, without danger to life or limb. Picture an ultramanoeuvrable high-performance tug in the command of an experienced tug master that can work safely at LNG terminals, within confined channels or locks, or under the bow of a ship while underway.

Yes, drone technologies have opened up a new realm of possibilities for tug ship handling operations.

As a result of research and development for over more than a year, Robert Allan Ltd. has announced its new autonomous tug concept, the RAmora. The flagship vessel of Robert Allan Ltd.’s new TOWBoT (Tele-Operated Workboat or

December 2015/January 2016 BC Shipping News 33

TUGS Tug) series, the RAmora 2400 is a versatile towing platform designed primarily for ship assist and berthing operations. A high-performance tug with a bollard pull of 55 tonnes, the RAmora 2400 features a hybrid propulsion system and substantial battery storage capacity to enable extended operation even in potentially hazardous environments such as LNG terminals or fire-fighting situations.

RAmora is designed to leverage — not lose — the capabilities of a traditional tug and operator by working in tandem with a conventional ‘command tug.’ An experienced tug Master, operating RAmora remotely from the command tug, will use the ‘immersive telepresence’ features built into the RAmora console, including live 360-degree video and real-time electronic position-sensing from RAmora to capture a continuous on-board perspective for safe and effective ship handling.

An advanced real-time control system provides the interface for the operator, as well as on-board manoeuvring/positioning controls, equipment and workspace monitoring and safety management functionality. This control system design has been developed in partnership with International Submarine Engineering of Port Coquitlam, Canada, and is derived from proven remotely operated vehicle, autonomous underwater vehicle and

surface vessel applications. It gives RAmora unparalleled flexibility for operation at various levels of autonomy suited to the situation — from a low level where the operator can pilot RAmora directly, to a high level where RAmora can be left to undertake work functions semi-autonomously under the operator’s supervisory control.

In keeping with Robert Allan Ltd.’s commitment to design top performing workboats, RAmora is fitted with Voith Schneider Propeller (VSP) drives arranged in a fore/aft configuration for exceptional omni-directional manoeuvrability, profiting from experience gained with Robert Allan Ltd.’s new RAVE tug concept. The hull form, designed for high stability and good seakeeping performance in waves, is the product of extensive development work including CFD and towing tank testing. Yet, being a TOWBoT with no need for a conventional wheelhouse, crew accommodations, domestic systems or lifesaving equipment, RAmora is simpler and more compact than any conventional tug of comparable performance.

Additionally, the RAmora 2400 has several resourceful and innovative features.

Heavy-duty cylindrical fendering is installed about the entire deck perimeter to allow RAmora to push from any point.

Image courtesy Robert Allan Ltd.

The RAmora 2400 — the possibilities for vessels in the TOWBoT (Tele-Operated Workboat or Tug) series are endless.

34 BC Shipping News December 2015/January 2016

A stabilized line-handling crane is used to pass the end of the towline to the ship, a feature actually originally introduced by Robert Allan Ltd. to manned tugs in the late 1970s! The hawser winch is installed forward in a well-protected deckhouse.

A unique curved and slotted towing staple positioned near midships keeps the towline close to the deck and leading outboard to minimize heeling when towing from the side. The combination of the clear working deck, slotted staple design and fore/aft VSP configuration makes RAmora extremely versatile, and more importantly, safer for ship handling operations which pose higher risk to crewed tugs, such as working in close proximity to the bow of a ship that is underway, or within confined channels or locks.

Likewise, RAmora’s crucial secondary functions bring emergency capabilities to the harbour environment that are not readily available from crewed tugs. In addition to being equipped with off-ship fire-fighting (fi-fi) capability to “Fi-Fi 1” standard, RAmora has two 1200 m³/ hr fire monitors supplied by electrically-driven fire-fighting pumps, and the crane boom can be optionally fitted with a smaller 600 m³/hr fire monitor and camera. Also, since it has no crew, RAmora can fight a fire more closely and for longer periods than is possible with conventional fire-fighting vessels while keeping crew out of harm’s way.

Robert Allan Ltd. is determined to provide only a high quality, wellresearched design product, and has been working with operator clients, a major Classification Society, Voith and other supplier partners to ensure the RAmora TOWBoT system is fully viable, safe, highly reliable and meets the requirements of local authorities.

The possibilities for RAmora and other vessels in the TOWBoT series are seemingly endless. With its fundamentally simple arrangement and a control system that is adaptable to future applications which require even higher levels of autonomous operation, the door is now open to tailoring further TOWBoT designs derived from RAmora to closely suit any client’s specific operational requirements — not only for tug operations, but also for other workboat applications such as rescue/salvage assistance, oil spill response, long-distance line towing or remote intervention tasks. As a first of its type, the RAmora is set to become a powerful new player in the modern tug fleet in the years to come.

CLASSIFICATION SOCIETIES

Bureau Veritas presentations yield useful information for local industry

W

ith a number of senior executives from Bureau Veritas visiting Vancouver in late October, there were two opportunities for the local maritime industry to hear presentations from Gijsbert de Jong, Market Segment Manager, Offshore Service Vessels, Tugs & Dredgers from the BV head office in France. Mr. De Jong was joined by his colleagues from the Paris office, Martial Claudepierre, LNG Solutions Business Development, and Konstantinos Chatzitolios, Business Development Manager, Dry Cargo Ships and Containers; Daniel Giani, Marine Regional Chief Executive (U.S. and Canada) from Florida; and, proudly playing city host, KK Yap, Business Development Manager with the Vancouver office.

Presentation #1

Developments in the towing and coastal shipping industry

A

New digital control technologies were stimulating new ideas on ship handling — for example, vessel designs like the Robert Allan Ltd. RAmora 2400, an autonomous tug which could be used for operations in hazardous environments or fire-fighting situations to eliminate risks to crew, were under development.

De Jong further reviewed developments in coastal/short sea shipping that were being seen in vessels of many types including container ships, oil and chemical tankers, ferries, dredgers and fishing vessels. Key design considerations included operating areas and port

Image courtesy Robert Allan Ltd.

t an industry reception hosted by BV, Gijsbert de Jong provided an overview of developments in the towing industry.

Starting off with a review of how ship size was impacting on tug design and size, De Jong noted that tugs must be built with more power — a higher bollard pull, greater speed and more manoeuvrability — to be able to meet the demands of the industry. In addition, the increase of exposed offshore oil and gas terminals with operations taking place in more severe conditions and harsh environments required terminal tugs with equipment suitable for towing operations at sea.

He also noted that the strong growth of the sustainable energy and coastal engineering industry (for example, offshore wind farms, dredging and fixed offshore oil and gas units) was creating the need for tugs and workboats to provide multiple support functions such as supply, installation and maintenance. Salvage operations required towing vessels with pollutioncontrol equipment, including salvage and rescue equipment, oil recovery equipment and fire-fighting equipment.

Touching on increasing “eco-awareness,” De Jong noted the trend toward energy efficiency by using alternative fuels and power concepts — such things as dual fuel and hybrid power generation — and the optimization of energy efficient operations through on-board metering of fuel consumption and greater crew awareness and operations planning.

Gijsbert de Jong, Market Segment Manager, Offshore Service Vessels, Tugs & Dredgers, Bureau Veritas

restrictions, environmental considerations, energy efficiency needs and operational flexibility and versatility.

In looking at each variable in more detail and its impact on vessel design, De Jong made the following points: Coastal passage requirements and port limitations would determine the main dimensions of a vessel and requirements for loading/unloading

Robert Allan Ltd.’s RAmora 2400 an autonomous tug, demonstrates the kind of advances in design and technology that are changing the industry. For the full story on the RAmora 2400, see Page 33.

December 2015/January 2016 BC Shipping News 35

CLASSIFICATION SOCIETIES gear. Consideration of weather conditions could lead to the optimization of steel weight during the design stage and loading/unloading aground at tidal berths could necessitate bottom strengthening.

Optimized hull forms to minimize ship resistance and fuel consumption were taken into consideration to address environmental stewardship issues — as an example, De Jong pointed to a BV subsidiary, HydrOcean, that provides hydrodynamic optimization solutions based on advanced and well-proven CFD technology. Additional options to provide efficiency and greater environmental friendliness include switching to an alternative fuel; installing scrubber and SCR technologies to clean exhaust gasses; or moving to a hybrid power system, combining multiple fuels with multiple power generation sources.

Operational flexibility could be achieved in design features — for example, integrating large cargo decks, open and closed hatch operations and high manoeuvrability to provide for coastal shipping “cross-over” vessels,

which can operate as cargo vessels and as multi-role offshore support vessels, for example for transporting large offshore modules or for cable laying.

In reviewing the regulatory regime for tugs, De Jong noted a lack of an international standard and how collaboration between BV, Lloyd’s Register and ABS through the Safe Tug Joint Industry Project (STJIP) had developed a harmonized set of classification requirements.

The basic principles of harmonization followed by the STJIP included recognizing that there could not be a “one size fits all” approach; that the approach should be practical but should stay openminded towards innovation; and that industry involvement through feedback loops with STIJP partners was critical to success. The scope of technical requirements included a definition of design loads for towing, escorting and pushing; towing and escort stability and equipment; a safety matrix for fire safety, lifesaving appliances, radio installations and navigation equipment; and anchor equipment. The scope also included consideration of the interaction between

36 BC Shipping News December 2015/January 2016

the tug and the assisted ship. Building further on the results of the STJIP, BV developed the Safety Guidelines for the Design and Operation of Tugs, which were published in August 2014 in Guidance Note NI617.

In addition to design factors, crew training and familiarization was another component that was important to consider. Accident and incident investigations have demonstrated that crew training and familiarization are key to safety. On-board operational training, simulator training, and specific training on emergency procedures were activities that would assist in risk mitigation. In addition, tug operators were being encouraged to implement Safety Management Systems (SMS) for the tug fleets. While mandatory for tugs over 500 gross tonnes, De Jong said that a simplified approach might be something to consider for tugs under 500 gt.

In summary, De Jong asserted that the towing industry was at the forefront of maritime innovation. He outlined next steps with regard to the development of BV’s safety guidelines, including the

CLASSIFICATION SOCIETIES collection of user feedback to further improve the guidelines; further development of stability criteria to include innovative designs; further development of operator guidance for escort operations; and continued work in research and development, for example, simulations to assess a tug’s escort

capability limits and the behaviour of combined systems of escort tug, winch and towline.

Important progress has been made on the development of international intact stability criteria for tugs by IMO’s Correspondence Group on the development of amendments to the 2008 Intact

Presentation #2

Stability Code (IS Code). The group has taken the harmonized towing stability requirements published by BV into consideration in its draft report to the Ship Design and Construction Committee, which will be discussed by the Committee’s next meeting in January 2016.

Role of class in a fast changing environment Photo: BC Shipping News

I

nternational Ship-Owners Alliance of Canada Chair Oscar Pinto welcomed guests and introduced De Jong who, in addition to providing an overview of the Bureau Veritas Group and the role of classification societies, imparted a great deal of information on recent developments within the marine industry and an outlook on future issues and new technologies.

Background

The Bureau Veritas (BV) Group, with close to 70,000 employees and 1,400 offices and labs worldwide, provides global testing, inspection and certification not only for shipping but for a diverse array of businesses — construction, consumer products, and commodities to name just a few. The company was founded in 1828 in Antwerp but has been headquartered in Paris since 1833.

BV is the world’s second largest testing, inspection and certification company and the largest involved in ship classification.

With a global network that spans four zones — North Europe and Americas; South Europe, Middle East and Africa; North Asia; and South Asia, BV’s Marine and Offshore division has more than 2,300 technical staff, including naval architects, marine engineers and surveyors; and 180 survey stations in more than 90 countries.

The BV classed fleet, averaging in age at 13.3 years, is made up mostly of dry bulk ships and tankers with the rest split amongst container ships, passenger vessels, gas tankers, cargo ships and offshore vessels. The BV-classed fleet stands at 11,250 ships totalling 108 million gross tonnes with an order book that is set to add another 1,800 ships (and 16.9 million gross tonnes).

In addition to highlighting some of the key deliveries made in 2015 — for example, the JS Ineos Insight, a 27,500-cubic-metre-capacity LNG/LEG/

From left to right: Lanna Hodgson, Konstantinos Chatzitolios, KK Yap, Gijsbert de Jong, Oscar Pinto, and Daniel Giani.

LPG carrier which is the world’s first ethane-fuelled ship (dual fuel) — De Jong gave examples of new types of ships that were currently under construction. The innovative projects included 15 ice-strengthened LNG carriers being built in partnership by Teekay, MOL and Sovcomflot at Daewoo Shipbuilding and Marine Engineering in Korea; and three 40-metre, 108-tonne bollard pull escort tugs, designed by Robert Allan Ltd. for the Norwegian company Østensjø — the RAstar 4000 DF is the most powerful dual fuel LNG terminal tug developed so far.

The role of class

At a most basic definition, classification societies “assist clients in improving their performance by offering services and innovative solutions ensuring that clients’ products, infrastructure and processes meet standards and regulations in terms of quality, health and safety, environmental protection and social responsibility.” Using a reference standard, class will provide an

assessment with the assurance of full independence from any design, manufacturing, contracting or insurance influence, and deliver a compliance report.

Mr. De Jong further outlined the scope of classification rules, the sources of authority and an overview of the history of delegation to classification societies by national administrations. To the point of delegation, De Jong noted an increase in the practice due to a number of factors including the high competency of class in ship safety and technical regulations; the international network of class that allows for worldwide availability of technical experts for surveys and inspections; and Flag State budget restrictions coupled with an increase in safety, environmental, security and labour regulations.

Citing their contribution to the safety and reliability of ships, their extensive knowledge and experience in the areas of design, construction and the operation of ships, and their continuous investment in research and development, De Jong

December 2015/January 2016 BC Shipping News 37

CLASSIFICATION SOCIETIES underscored the important role class plays within the maritime industry.

Developments and outlook

Mr. De Jong made the following comments regarding the current environment in which the shipping industry exists: • Current markets are instable and volatile and will stay that way for a while due to a number of factors, including economics, geopolitics, and a strained financing climate.

• However, there are also new and exciting technologies: • The ship is no longer a vessel with an engine and a bridge and a small crew running it. A ship has become an integrated system of systems with all kinds of software controls and increasing automation.

• There is a rise in hybrids — alternative fuels like LNG and ethanol along with batteries and fuel cells and a diverse combination of dual fuel power sources.

• In a good example of how technology was increasingly affecting the industry, De Jong pointed to Robert Allan Ltd.’s RAmora 2400, an unmanned workboat that could operate in hazardous environments (for example, fire-fighting) without risk to crew.

• Climate and environment issues are unavoidable for the industry.

Regulations for emission control and pollution prevention are high on the agendas of international governments and will continue to feature prominently in new vessel designs and technology.

• Artic shipping — becoming more and more important not just for resource extraction but also as a shipping route.

Accompanying the advances in technology and new developments in ship design are more and more regulations. BV and other class societies play in important role in the assessment of new technologies and the development of regulations. Their cross-industry co-operation on research and development has supported and stimulated innovation and the development of effective rules in addition to providing technical support to Flag States and the IMO for the advancement of a consistent international regulatory framework.

Through the International Association of Classification Societies, with 72 active resolutions and 350 contributing engineers, class has provided key contributions like the IGF Code (the International Code of Safety for Ships using Gases or other Low-flashpoint Fuels), the code on noise on board ships, domestic ferry safety, and a unified data exchange format.

Season's greetings!

From the team at IMS Marine Surveyors & Lab

38 BC Shipping News December 2015/January 2016

IACS’ current key focus areas include the Harmonized Common Structural Rules for Bulk Carriers and Oil Tankers (CSR), passenger ship safety, structural safety of container ships, complex on-board systems, and LNG bunkering guidelines.

In further recognition of the benefits of cross-industry co-operation, De Jong outlined the collaborative efforts of BV, Lloyd’s Register and American Bureau of Shipping to develop harmonized safety guidelines for the design and operation of tugs. Their efforts resulted in new class notations; stability criteria and methods for escort performance assessment.

Additional aspects covered under De Jong’s presentation included an overview of IMO emission regulations and associated benefits of using LNG to reducing SOx, NOx and particulate matter (however, De Jong noted that methane slip may limit the reduction potential in CO2).

Mr. De Jong also reported on the European Union’s mandatory Monitoring, Reporting and Verification scheme which will impact shipping significantly.

Currently, GHG emissions in the EU from all industries with the exception of shipping, are covered by some form of policy instrument. The EU is working toward implementation of a mandatory reporting policy for international shipping by 2017.

An analysis tool has been developed by BV to assist ship operators. The Ship Energy Efficiency Calculation and Analysis Tool (SEECAT) computes the ship’s energy balance and efficiency, allowing for optimization of the energy production, distribution and consumption. In this way the best possible design solution can be found and different solutions can be benchmarked against each other.

In looking forward, De Jong raised such issues as underwater radiated noise and concerns that were being raised on the sound impact of shipping on marine mammals. Further, while new digital technologies brought many benefits and opportunities for the industry, De Jong cautioned that the industry was still trying to determine how best to capitalize on many of these technologies – for example, how to get the most out of “big data.” He also noted additional risks, such as cyber security, that required the industry’s attention.

In addition to the presentation, a number of hand-outs from BV were made available for attendees. They covered a diverse range of issues including safety and performance for container ships, LNG transportation and oil and chemical tankers.

LPG CARRIERS

Liquid petroleum gas tankers

By Syd Heal

I

last wrote an article entitled The Gas Carriers (BC Shipping News, July 2014) in which I primarily featured LNG tankers and their anticipated appearance on the B.C. coast when it was reasonable to expect these massive ships would become regular visitors to our shores.

Alas, Canada, which too frequently gets bogged down in a morass often of its own making and encouraged by narrow-vision, special interest groups, has had its oil and gas industries throttled.

I look at these shrill emissaries of political correctness as they rant on about the dangers of pipelines, the need to leave our resources in the ground “for future generations,” and the portrayal of every crude tanker as disaster waiting to happen and I note all the items they use that require oil — polyester clothing, shoes,

Canada, which too frequently gets bogged down in a morass often of its own making and encouraged by narrow-vision, special interest groups, has had its oil and gas industries throttled. brief cases, purses, cosmetics, motor car parts, paints and rubber tires, and I suppose that almost everyone uses a computer, cell phone or other electronic gadget. All of these items include much plastic in their manufacture.

These are just a few of the many hundreds of thousands of items that are in every day use by billions of people around the world. Without plastics, which mostly originate from oil, natural and petroleum

gases, the world’s economies would collapse. It’s not hard to see LNG replacing oil for many applications including fuel for road vehicles, rail and shipping, but I think the world’s need for petroleum by-products as feed stock for the petrochemical industries will be with us for hundreds of years into the dim and distant future.

The whole world is a market for all manner of petro-based consumer

The Navigator Aurora, a 35,000-cbm ethane and ethylene tanker fuelled by LNG. Note the two big white tanks on deck for storage of LNG fuel.

Photo courtesy Navigator Gas

December 2015/January 2016 BC Shipping News 39

LPG CARRIERS atmosphere until a process was developed to separate the propane from the butanes which constitute LPG’s main components. products and the range of plastics in use is being constantly improved with new forms and uses being developed. We are already dependent on petrochemicals like never before and the demand just keeps growing. It’s not just consumer goods and manufactured essentials, but heavy users are also the fertilizer and explosive industries, both of which use much ammonia. Ammonia, a true petro product, is not rated as a plastic but every household will be familiar with it in many cleaning products.

Unlike LNG — which comes like crude oil straight out of the ground, sometimes combined with such valuable elements as sulphur — liquid petroleum gas (LPG) is the other primary gas derived from oil and is mainly a by-product of the oil refining process. LPG used to be burned off into the atmosphere until a process was developed to separate the propane from the butanes which constitute LPG’s main components. For that reason, it has become a growing opportunity for specialist ship owners who are interested in providing high-tech shipping solutions to the refining industry, and plastics and fertilizer manufacturers.

As I noted in earlier articles, one of my interests is in researching shipping stocks, particularly those listed on the NYSE and the NASDAQ exchanges. The market for shipping shares has been mostly pretty dim since 2008 with more valleys and fewer peaks for actual investors. It was through this process that I came across something of a gem in the form of Navigator Holdings, a British-based Marshall Islands incorporation dominated by one big American investor, Wilbur J. Ross.

Navigator Holdings is the public ownership and investment

40 BC Shipping News December 2015/January 2016

Photo courtesy Navigator Gas

LPG used to be burned off into the

The Navigator Saturn, a 22,000-cbm diesel tanker carrying ethylene. Similar ships in the fleet deliver propane, butane and ammonia.

vehicle listed on the NYSE, and Navigator Gas is its operating entity, but from hereon I will refer to both companies as simply Navigator, as together, they constitute a group. Having read their very comprehensive website, it was not long before I requested the annual report which for me, with only rudimentary knowledge of LPG, was a revelation! It told me as much as I could absorb about the fast growing industries of LPG production, distribution and transportation.

A map showing vessel positions on a given day also gave a fair geographic position for the Navigator fleet. As might be expected, there was a heavy concentration in areas on the U.S. East and Gulf Coasts, the Caribbean, the North Sea and Baltic, the Western Mediterranean, the Persian Gulf, S.E. Asia and Indonesia. There was no traffic in the Pacific and Australasia and just one vessel on the Chinese coast on that particular day.

The heaviest traffic appeared to be transiting the U.S. Gulf/ Venezuela route, to the Northern Europe range where big refinery concentrations exist. Areas such as Africa, the entire Pacific, Canada, Japan, Russia/Siberia do not appear to be on Navigator’s visiting list although in a rapidly growing company with plans for expansion and as new markets are developed, this perspective might already be out of date. However, one day is hardly representative of a whole year so that limitation should be considered.

Navigator Holdings was originally formed in 1997 by other owners who had ordered an initial five LPG tankers. In 2003, they

LPG CARRIERS ran into financial difficulties and sought Chapter 11 voluntary bankruptcy protection under U.S. law. In August 2006, the company emerged from bankruptcy.

As part of the settlement, the bondholders took over all remaining equity in the company which left Lehman Brothers as the largest shareholder with 44 per cent net equity. In 2012, Lehman, having suffered its own bankruptcy in 2008 and still in the process of liquidating their estate, was bought out by the WLR Group representing the interests of the aforementioned Mr. Ross with a holding of 39.5 per cent.

In November 2013, Navigator went through its Initial Public Offer (IPO) and raised fresh new capital, clearly connected to the purchase of 11 Handysize LPG tankers from Maersk. This was the entire fleet of Maersk in this class which was sold to simplify the complex structure of the Maersk group and redeploy capital into core holdings. This sudden boost of the Navigator fleet, with 11 second-hand modern vessels, was further boosted with the start of a new building program which, at the end of 2014, brought the fleet up to 26 LPG tankers in commission plus another 11 new buildings firmly committed to an enlarged total of 37 vessels. Thus, Navigator can now claim to be the largest owners of Handysize LPG tankers in the world, a record for rapid growth that would be hard to beat (if the irresponsible ordering of speculative bulkers and regular tankers which has led to poor markets for such tonnage is excluded).

The opening remarks of Mr David J. Butters, Chairman, President and CEO, were very apt when he wrote in the 1914 annual report, “With the dramatic changes in Saudi Arabia’s energy policy and the ensuing drop in oil prices, it’s been a challenging year for the oil and gas services sector. But if a certain amount of gloom has set in among U.S. energy producers and investors, one place it hasn’t reached is Navigator Gas.” A good expression of optimism but perhaps the massive increase in U.S. production could also be attributed to shale oil and gas.

Space only permits a limited comment on the finances of the company, but they are very strong with Gross Revenue in 2014 of $304.9 million, Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) were $161.3 million and Net Income of $84.5 million.

There has been a consistent upward curve in all aspects of the company’s

finances since an IPO that must have been the envy of many other ship owners in most segments of the industry.

The Navigator fleet breaks down into three main classes bearing in mind that the commercial language of cargo

capacity is expressed in cubic metres (cbm) rather than deadweight tonnage (dwt). These are 20,000 cbm and 22,000 cbm with some variation between these numbers and a comparable deadweight of about 23,400 dwt. A new, larger size

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Books for Christmas!

PUSHING THE BEACH by AH. Meadows with SC Heal Paperback 8.5” x 11”. 221 pages. Fully indexed and illustrated with large selection of colour photos and maps. $35.95 A full account of Marine Link Transportation, a highly successful BC Shipping business and its flagship AURORA EXPLORER. Fully explains its connections to the fishing, tug & barge, tourism, terminal, businesses and a host of characters and situations.

INBOUND TO VANCOUVER — BC’s Offshore Trade and Ocean Shipping Industries, 1850 to 1945 by SC Heal Paperback 8.5”x 11” 219 pages. $32.95

OUTBOUND FROM VANCOUVER — BC’s Offshore Trade and Ocean Shipping Industries, 1946 to 2005. $32.95 These two books taken together provide an ongoing history of the port of Vancouver and its outports as indicated in the titles.

About 450 photos between the two books

THE LOG BARGES by SC Heal Paperback 9” x 6”. 141 pages. Fully indexed and illustrated with large collection of b&w ship and action photos and plans. $20.95

THE LOG SHIPS by SC Heal Historic account of the only two self-loading, self-propelled, self–dumping, bulk log carrier ships. $20.95

Taken together these two books constitute the only complete history of the log barge industry from the first in 1925 and through to modern times.

All books are available through select stores as well as BC Shipping News (postage and handling extra).

Contact jane@bcshippingnews.com or 604-893-8800 42 BC Shipping News December 2015/January 2016

group of four ships is under construction in China for delivery in 2016. They have a capacity of 35,000 cbm with a capability of carrying ethane and ethylene, similar to a certain number of the earlier smaller ships. The picture of Navigator Aurora illustrates this larger-type class and notes the large white tanks ahead of the bridge for storing LNG which is the propulsion fuel — no doubt a sight which will become increasingly common at sea.

What of the prospects for LPG expansion in Western Canada? Not too good I would suggest, as failure to build new pipelines and improve existing ones is creating its own setbacks, although oil industry service companies like Gibson Energy and Kinder Morgan continue to move ahead with their projects. A lot of our LPG output clearly goes to domestic manufacturers of end products.

Many Canadians, including those in the left-wing sector, favour an enlarged refining industry to bring growth through higher-paying jobs in a profitable export-focused industry. Such proponents have a point but it is economics that makes the final decision. Instead, the country engages itself in a bitter debate which, if the naysayers have their way, will leave us at a great disadvantage as American and Australian projects continue to surpass us.

At this point, the proposed Northern Gateway pipeline for heavy crude has been virtually killed; the TransMountain pipeline of Kinder Morgan from Alberta to Vancouver Harbour is still fighting its way through red tape and opposition; and by now everyone is well aware that the Keystone XL project will only be possible after President Obama steps down.

Everything in the oil and gas industry is interlocked. We will only achieve success in developing a prosperous resource industry when this factor is fully understood and acted upon. In this country we only have two small refineries in B.C., only one of which is on the coast in Vancouver Harbour. It is hardly fair that the whole country be held to ransom by naysayers who don’t fully grasp the importance of the industry.

Syd Heal, a veteran of the marine industry and a prolific writer and publisher of marine books, can be contacted at richbook@telus.net.

GLOBAL SHIPPING Throwing stones in greenhouses:

Global shipping and climate change after Paris

By Jeffrey J. Smith

I

t will seem as if the whole world has descended on Paris when the global climate change summit convenes this December. Formally, the 21st Conference of the Parties to the UN Framework Convention on Climate Change (the UNFCCC) marks a turning-point in how humanity will collectively address the problem of greenhouse gas emissions.

The challenge is acute across the board in environmental terms and the policy choices to be made by governments to implement durable domestic measures.

The global maritime industry, while predictably featuring only peripherally in Paris, has a continuing important role in the effort against climate change. That has two aspects, namely, to pursue governance within the industry such that its overall greenhouse gas emissions (GHGs) are reduced over time, and to continue providing an efficient means of moving the world’s people and goods in order to contribute to successes in climate change in other industries including manufacturing, mining and power generation.

Several things have ensured the global maritime industry is suitably positioned to address climate change. An important factor has been the cost of fuel over the past decade. Ship operators have been confronted with stubbornly high fuel costs, at least until what now seems to be a sustained reduction in the market price of petroleum over the past 12 months.

Ship owners, in turn, have had to reckon with the through-life costs and capital improvements to their vessels in this era of expensive fuel. The evidence is not entirely clear, but the cost of fuel has at least been a significant impetus for efficiency and, thereby, a reduction in GHGs in the industry. This is not the whole story when it comes to climate change, as we must recall the global shipping

The global maritime industry, while predictably featuring only peripherally in Paris, has a continuing important role in the effort against climate change. fleet continued to grow even after the 2008 financial crisis and with reduced demand in some sectors, for example dry bulk carriage. Modest efficiencies in fuel use, carefully won through operating innovation and technical advances, and by the use of alternative fuels such as liquefied natural gas and even methanol, have been outstripped by a sheer growth in numbers. It is something set to continue, giving the industry a kind of

existential challenge when it comes to climate change.

A second factor in the current position of the industry has been the detailed measures arrived at by the International Maritime Organization for fuel efficiency in ocean-going ships. The origins of this governance offer some prediction as to what can be done to achieve further gains after Paris. The phenomenon by which shipping states (and so the industry) have

Four climate change scenarios. It is generally agreed that global warming must be limited to an increase of two degrees Celcius. To accomplish this, the lowest line — RCP3 indicating a strict upper limit of an equivalent of 421 parts per million of carbon dioxide in the atmosphere — must the the goal coming out of Paris. (IPCC 5th Report, 2014)

December 2015/January 2016 BC Shipping News 43

GLOBAL SHIPPING

Changing ice cover in the Arctic is expected to open up new, shorter shipping routes, helpful in reducing the industry’s overall use of petroleum. This map shows the extent of sea ice in September 2015, the fourth smallest area on record, with the magenta line illustrating the median September ice cover for the years 1981-2010. (US National Snow and Ice Data Centre)

Photos courtesy Jeffrey J. Smith

been willing to work toward fuel efficiency and GHG reduction measures can be called the “SOLAS effect.” This is the willingness of states and the industry to accept what has evolved to be complex regulation, in SOLAS itself for vessel safety, and over recent decades for crew competency, environmental protection and security measures. The IMO Polar Code for shipping is the latest example of the successful negotiation and implementation by states of detailed rules for the industry.

When it comes to the environment, the stage was set with the IMO’s 1973 maritime pollution convention, MARPOL 73/78, which has grown to encompass most adverse impacts of ship operations. This regulation — adopted by shipping states such

as Canada into domestic legislation for actual application in the industry — hardly stands in isolation. Safer and more environmentally responsible shipping has been realized through other initiatives, including soft measures such as best practices adopted within the industry, the technical guidance of classification societies, and enforcement through the UN Law of the Sea Convention (UNCLOS) port state control system. Annex VI of MARPOL, first crafted as air quality regulations, has been the basis for shipping states to start regulating GHG emissions after 2005. (It has been a short decade since. Only in that year did the operative part of the UNFCCC come into effect, the Kyoto Protocol, with targets for states and a clear “delegation” of GHG regulation in global shipping to the IMO.) Because of a running head start to ensure improved coastal air quality by controlling harmful by-products from prime mover (overwhelmingly diesel) emissions — nitrogen and sulphur oxides, and particulate matter — there was already a basis for states to start negotiating over what might be called “atmospheric quality.” The discussions began in earnest as a pivotal UNFCCC Conference of the Parties loomed in 2009.

The innovations are now well known: the Energy Efficiency Design Index (EEDI) for mandatory application to new buildings, and the Ship Energy Efficiency Management Plan (SEEMP) for all vessels. These measures, Regulations 19–23 of Annex VI, were adopted in July 2011 and became effective in 2013. The EEDI is now the most tangible of GHG reduction measures. Over a 10-year period, it is intended to result in up to 30 per cent improved energy efficiency in several categories of diesel propelled ships (but not “non-conventional propulsion” systems such as diesel-electric and gas turbine plants). In general, three phase-in periods are to result in stepped improvements of 10 per cent (2015–2019), 20 per cent (2020–2024), and 30 per cent (after January 1, 2025) for vessels built in each period. Vessels must maintain an International Energy Efficiency Certificate that details routine surveys and maintenance of efficiency and the scheme will see ships being checked under the port state control regime.

Regulations 22 for SEEMP and 23 for technology transfer and co-operation round out the present Annex VI GHG framework. The SEEMP is a soft measure intended to “establish a mechanism for a company and/or a ship to improve the energy efficiency of a ship’s operation.” The goal is improvement of “a ship’s efficiency through four steps: planning, implementation, monitoring, and self-evaluation and improvement.” (See the IMO’s 2012 Guidelines for the Development of a Ship Energy Efficiency Management Plan, Resolution MEPC.213(63)). Ship speed is

The difference in coastal air quality between Vancouver and Shanghai could not be greater. Left: Shanghai (on the Bund), June 2014; right Vancouver-English Bay, June 2015.

44 BC Shipping News December 2015/January 2016

GLOBAL SHIPPING the primary determinant of fuel consumption and, therefore, efficiency on a unit basis of tonnage moved over distance and, hence, tangible measures are geared to better voyage planning with more direct passages at lower average speeds. High fuel prices, set to increase with the elimination of low-cost heavy fuel oils in order to meet Regulations 14 and 18 sulphur reduction targets, have practically compelled shipping operators to consider such approaches.

Two economic factors will affect the success of this scheme, namely, variations in the market price of ship fuels, and operating costs of existing ships and the capital cost to replace them.

When it comes to cost, although shipyard capacity remains high (including in those states — China, Japan and South Korea — which build the majority of the global fleet captured by the Regulation 21 EEDI standard) and capital continues to be inexpensive, the current oversupply of ships suggests new construction must decline for perhaps six to 10 years.

On its own, MARPOL has arguably reached its limit as a regulatory instrument to govern GHG reductions in the global shipping sector. The rules in Annex VI to ensure air emission quality — to reduce pollution that impairs human health — have worked through a combination of factors, including strong consensus for their creation, long introductory periods, the salutary effect of high fuel prices in recent years, a continuing trend of new shipbuilding, adoption and local enforcement of air quality standards by states, and the supporting role played by marine classification societies. IMO member states accept objective technical design and performance standards for shipping. But they have yet to allow additional cost and taxation-like burdens on their globally trading shipping industries, however effective (or at least fair or redistributionist) that may be. GHG reductions from global shipping have only just started, borne of a decade of experience with nitrogen and sulphur emissions and, this year, the first efficiency standards for new ships.

A few predictions can be ventured. The first is that the Kyoto Protocol “delegation” of GHG reduction, for regulation and market measures alike in the marine industry, will continue to fall to the IMO (as it will to the International Civil Aviation Organization in that industry). This is because the contribution of GHG emissions from shipping, more or less steady at three per cent of all human-generated GHGs (within an increasing presence of such gases in the atmosphere) is not so large that states will seek the additional regulatory burden of individual regulation. Moreover, the IMO proved successful in developing significant measures over a short period of time.

...the contribution of GHG emissions from shipping...is not so large that states will seek the additional regulatory burden of individual regulation.

Photo courtesy Jeffrey J. Smith

In the medium term, perhaps the next decade, shipping states will come to accept that GHGs can be priced, that is, their costs can be monetized and made subject to taxation, tax incentives, exchangeable credits and other fiscal incentives. Success here will depend on industry cohesion, that is, acceptance of the IMO as the organization to achieve a widely adopted approach, especially by industry associations such as BIMCO, which over time will be entrenched through formal regulation, although likely not within Annex VI. The end of this period will certainly see ships subjected to fuel efficiency performance assessment by national administrations and routinely in the port state control system. Finally, the move to ever-larger container ships and a gradually decreasing worldwide consumption of petroleum (and, as we have seen briefly in 2015, coal) carried in substantial amounts by sea should theoretically mean a decline in the overall numbers of commercial ships.

Over the long haul, humanity’s transition away from petroleum as a fuel will present the global shipping industry with a particular challenge, one shared with aviation: How can the use of fossil fuels for international transportation be justified? Two answers can be given to this. The first is that innovation in the industry has always been successful, whether in the transition a decade ago away from tin-based antifouling paints, or the development of large diesel engines suited to marine propulsion. Until fusion power is available on a commercial scale, ships will need to carry with them some form of fossil fuel. And so a second answer is that ships have always been the efficient carriers of global trade. More than any other sector or industry, a rationed allocation of petroleum for shipping — a tolerance of petroleum as a fuel — during a long period of transition makes sense because of humanity’s deep reliance on the industry and because the industry makes possible GHG reductions in other sectors.

Jeffrey Smith teaches international law in the Norman Paterson School of International Affairs in Ottawa. A former RCN chief engineer and law of the sea counsel to the United Nations in East Timor, he was Chair of the National Council of the Canadian Institute of Marine Engineering from 2009 to 2014.

Gambier Island (Port Graves Bay), February 2014. The ultimate in air quality.

December 2015/January 2016 BC Shipping News 45

LEGAL AFFAIRS Case comment on the recent court decision in Snow Valley Marine Services Ltd. v. Seaspan Commodore (The)

By David S. Jarrett

A Vancouver Lawyer with Bernard LLP

In keeping with the tug and tow theme of this month’s edition of BC Shipping News, we thought that it would be interesting to readers to discuss the Federal Court’s recent judgment in Snow Valley Marine Services Ltd. v. Seaspan Commodore (The). The action was commenced following the sinking of the plaintiff’s assist tug the Warnoc (formerly the Night Shift). The tug was lost during efforts to free a fouled anchor on the defendant Seaspan’s log barge, the Seaspan Survivor, in October 2011 at Clio Bay near Kitimat, British Columbia. During the course of these operations, the anchor fell free and pulled the Warnoc to the bottom of the sea. Fortunately, there were no injuries arising from the sinking but the Warnoc was lost.

The decision is of interest as the court examined the particular facts that preceded the sinking in some detail, as well as setting out a detailed assessment of the value of the lost tug.

The court was asked to determine who was liable in negligence for the sinking and, if the defendant vessel owners were liable, what was the measure of the damages owing to the Plaintiff for the loss of its tug. The parties to the litigation of course argued that the sinking arose from the other party’s negligence. The plaintiff argued that the defendants were liable for failing to secure a safety line to the anchor from the dozer boat crane on the Seaspan Survivor. Contrary to this, the defendants argued that the cause of the sinking was the failure of the crew of the Warnoc to ensure the safety of their tug, and in particular by attaching a tow line to the anchor that did not allow it to be released quickly, or at all in the event of the anchor falling free.

The court’s reasons for judgment contain detailed summaries of the evidence provided by the parties at trial including the testimony of a number of witnesses

The court was asked to determine who was liable in negligence for the sinking and, if the defendant vessel owners were liable, what was the measure of the damages owing to the Plaintiff for the loss of its tug. that were either onboard the vessels involved or were involved in the aftermath of the sinking.

The Warnoc was initially involved as it was to deliver logs to the Seaspan Survivor for loading at Clio Bay at the request of the owner of the logs. The sinking occurred after the Warnoc delivered the logs and after the Seaspan Survivor was fully loaded.

Once loading was complete, the Seaspan Survivor raised its stern anchor only to discover that it was fouled as the chain was tangled around the anchor, causing it to be lifted cross ways. Only after the efforts of the crew of the Seaspan Survivor and the defendant’s tug, the Seaspan Commodore, proved unsuccessful did the Warnoc’s crew assist in an effort to untangle the chain from the anchor.

The Seaspan Commodore’s anchor was attached to it by 90 feet of chain and then a long cable. The anchor and its chain weighed approximately six tonnes.

The court found that the crew on the Warnoc attached a tow line from the tug’s stern tow post to the fouled anchor and chain. Although there was a significant amount of evidence before the court as to whether the line from the anchor to the Warnoc was attached in a way that would allow the line to be quickly removed in the event of a problem, the court did not appear to ultimately make a finding of fact on that point. From reading the reasons and based on the fact that the Warnoc ultimately sunk, it appears that the tow line was attached to the tug in a

46 BC Shipping News December 2015/January 2016

manner that made it impossible to release quickly in the event of a problem, either by the actions of the crew or on its own by use of a “suicide hitch” that would come off the post if the tow line was slacked off.

Although the defendant’s crew attached the Seaspan Survivor’s dozer boat crane line to some point on the anchor chain as a safety line, the evidence before the court indicated that the safety line was attached at a point either 60 or 90 feet away from the anchor. Although the court did not ultimately decide how far down the chain the line was attached, it concluded that the safety line was attached a “considerable distance above the anchor.”

During the course of the efforts to free the anchor, the Warnoc apparently pulled and the anchor fell free. Presumably, this caused a significant length of chain to fall along with the anchor, which was enough weight to pull the Warnoc to the bottom of the ocean. One witness at the trial described the Warnoc as heeling over and then quickly sinking.

Interestingly, the only expert evidence that appeared to be considered by the court based on its judgement related to the value of the Warnoc and not in relation to the appropriate standard of conduct of the crews on board the vessels involved in the operation or whether any crew members fell below those standards. The court ultimately concluded that the conduct of the defendant’s crew in failing to properly secure the Seaspan Survivor’s safety

LEGAL AFFAIRS line to the anchor chain was causative of the loss.

The defendants argued that the crew on the Warnoc did not hold the required master or mates certificates pursuant to the Marine Personnel Regulation.

Those regulations required that a Master, Limited be one of the crew on a vessel like the Warnoc. The court did not accept this “technical” argument and concluded that although they did not possess the required statutory certificates, the Warnoc’s crew had extensive experience.

Ultimately on the facts before it, the court concluded that the lack of certificates for the crew on the Warnoc as required by the regulations did not contribute to the sinking of the tug.

The court ultimately concluded that the cause of the sinking of the Warnoc was the failure of the defendant’s crew to properly secure the Seaspan Survivor’s dozer boat crane line to the anchor or chain as a safety line during the efforts to unfoul the anchor.

Having concluded that the defendants were solely liable for the loss of the Warnoc the court went on to assess the amount of damages suffered by the plaintiff. Unfortunately, prior to the loss, the Warnoc’s owners had extensive work done to the vessel, including a complete refit that was completed only six months before the incident.

Interestingly, the only expert evidence that appeared to be considered by the court based on its judgement related to the value of the Warnoc and not in relation to the appropriate standard of conduct of the crews...

The evidence indicated that the plaintiff purchased a replacement vessel after the sinking. This vessel was not as suitable for use in northern B.C. as its predecessor as it had a deeper draft and was not a flat bottom. Both of these differences were apparently factors in the grounding of the replacement vessel in the time leading to trial.

The defendants argued that the fair market value of the Warnoc as at the time of the sinking should be used to calculate the measure of the plaintiff’s damages and introduced expert evidence that the fair market value of the vessel is at the time of loss was approximately $135,000 to $185,000.

The plaintiff argued that the damages should be based on the replacement value of the Warnoc and introduced expert evidence on of range of replacement values of between $325,000 and $350,000.

The court came to its ultimate conclusion on damages based on a consideration of the following factors:

• The market value of a similar replacement tug; • The cost of refitting of another tug to do the work of the Warnoc; • Compensation that should be paid to the plaintiff to place it in the same position as if the loss had never occurred.

The court noted that no comparable tug was available to the plaintiff and that the Warnoc was especially suited to the unusual work environment in Clio Bay. The court ultimately awarded damages to the plaintiff in the amount of $257,000 which was 60 per cent of the value of a replacement vessel as found by the court. Interestingly, the Warnoc was only insured for $180,000 as of the date of the sinking.

Ultimately, although the plaintiff was successful at trial on the negligence issue, as often happens in similar cases, it was not fully compensated for its loss.

David S. Jarrett is an Associate and Maritime Lawyer with Bernard LLP and can be reached at jarrett@bernardllp.ca.

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LNG IN BC CONFERENCE International LNG in BC Conference attracts great interest

W

With close to three trillion cubic feet of a natural gas supply in northern B.C., it is estimated there was enough to last for the next 150 years. industry on the West Coast would bring “incredible change” to the Province — not only in new opportunities, especially for smaller communities, but in its contribution to reducing air emissions.

“This year’s theme is Clean Energy.

Reliable Partner,” said Clark. “I can think of no better way to sum up British Columbia’s approach not just to LNG, but to growing our diverse economy and export markets. B.C.’s legislative and regulatory framework for the LNG industry achieved a balance to ensure competitiveness for investors while ensuring British Columbians benefit from a resource that belongs to them.”

and knowledgeable speakers and panelists. For example, the first panel, made up of senior executives from the major LNG companies, provided first-hand accounts and updates on their activities and progress. They also discussed the global LNG market within the context of B.C.’s opportunities for developing a vibrant LNG industry. Representatives from five proponents — WCC LNG, LNG Canada, PNW LNG, Kitimat LNG and Douglas Channel LNG — provided overviews that included details on the partners within the joint venture companies; specifics about the projects themselves, such as capacity, pipeline routes, and terminal details; and current status of the projects, including approvals and agreements that are in place and those in the works. Of the five, PNW LNG had issued a conditional

Conference Sessions

Plenary sessions were interesting and informative and featured experienced

Photos: BC Shipping News

ith over 3,000 attendees from around the world at the third annual International LNG in BC Conference, it was clear to see that the interest in B.C.’s burgeoning industry is a priority for many, including the Province of B.C. who were well represented with the Premier and senior ministers in attendance. The three-day conference agenda was filled with informative sessions on the many aspects of the LNG industry — from an overview of the current local landscape to technology and innovation in areas such as pipelines, LNG terminals and marine transport, to First Nations partnerships, skills and training for youth and business opportunities.

Premier Christy Clark provided the opening keynote speech and spoke to the strong advantages and assets B.C. has to offer. With close to three trillion cubic feet of a natural gas supply in northern B.C., it is estimated there was enough to last for the next 150 years. While B.C. has been extracting natural gas for the past 50 years, the development of an LNG

48 BC Shipping News December 2015/January 2016

LNG IN BC CONFERENCE LNG-Buy BC Advocate, as moderator, the audience heard from Lucy Praught, Spirit Strategies; Jim Longo, Ideal Welders; and John Turpin, Inlet Express who described how they had secured contracts with LNG proponents and offered a ‘lessons learned’ overview of their experiences.

The LNG-Buy BC program organized forums for all three days which created an opportunity for key stakeholders to engage in critical dialogue.

Trade Show

Financial Investment Decision with only one outstanding condition to be met (Canadian Environmental Assessment Agency approval).

Break-out sessions focused on innovation and technological advances for such sectors as marine, pipeline monitoring and LNG facilities as well as sessions which identified opportunities for upstream businesses and skills training. For the marine innovation session, Captain Stephen Brown (Chamber of Shipping of British Columbia) moderated a panel consisting of Robert Allan (Robert Allan Ltd.), Richard Wiefelspuett (Clear Seas Centre for Responsible Shipping), and Mark Wilson (BC Ferries). Captain Brown gave an overview of the LNG shipping industry, noting that there were currently 430 LNG carriers with another 160 carriers under construction. Allan covered off the capabilities tugs would require for escort services as well as looking at the use of LNG as a fuel for tugs. Wiefelspuett introduced attendees to the Clear Seas initiative which promoted unbiased, factual research as a basis for policy decision-making.

And Wilson described the experiences of BC Ferries in developing LNG-fuelled ferries as part of their fleet renewal plan.

In addition to plenary and break-out sessions, the Conference offered practical workshops that were more specifically focused. The LNG-Buy BC program organized forums for all three days which created an opportunity for key stakeholders to engage in critical dialogue. Presentations were given by notable figures — David Keane, President of the LNG Alliance; Phil Germuth, Mayor of Kitimat; Kim Baird, Former Chief of Tsawwassen First Nation; and Paul Wilson, Fasken Martineau — and attendees were encouraged to participate in panel sessions that discussed issues like the EPC (Engineering, Procurement and Construction) Practices Panel or the LNGBuy BC Success Stories Panel. This latter session in particular was very useful for attendees interested in providing services and goods to LNG project proponents. With Gordon Wilson,

With approximately 300 exhibitors, the trade show illustrated the importance of the LNG industry to business. The kinds of companies that would stand to benefit from the industry were diverse — for example, construction and building companies like Kerkhoff Construction and Chinook Scaffold Systems Ltd.; maritime companies like SAAM SMIT Towage and AAL Shipping; engineering and consulting firms like Embark Engineering, Gemstone Logistics and Golder Associates; transportation companies like Highland Helicopters, Canadian Helicopters Ltd. and Air Canada; and many, many more, including First Nations groups and the major LNG project proponents. The trade show also offered significant networking opportunities including a luncheon, evening reception and opportunity for exhibitors to join the luncheon and GameChanger Youth programming on the final day of the Conference.

Focus on Youth

As the Premier noted in her opening speech, a major focus of the LNG strategy is on creating jobs, and the Conference, appropriately, placed a strong emphasis on engaging youth to not only educate them on the industry but demonstrate the skills required and the kind of careers available for their consideration. The GameChanger Youth Expo saw approximately 1,500 students from Grades Five to 12 as well as undergraduates from across B.C. take part in a Science World Energy Show; watch live LNG demonstrations; participate in WorkBC’s Find Your Fit Tour (an interactive series of activities related to career planning); and visit the booths of training institutes like BCIT, Kwantlen Polytechnic University, and Langara College. A “GameChanger Interactive” session was held allowing students to participate in sessions focused around the career opportunities, leadership and educational aspects of LNG. The GameChanger program also included the GameChanger Competition in conjunction with Skills Canada BC and UBC where students were tested in areas such as technical proficiency, problem solving and creative thinking. Winners were honoured during lunch on the final day with delegates and exhibitors in attendance.

Photo: BC Shipping News

Conclusion

Captain Stephen Brown moderated a session on marine innovation with panelists Robert Allan, Mark Wilson and Richard Wiefelspuett

Overall, it was clear to see that the 2015 International LNG in BC Conference ensured all aspects of developing an LNG industry in B.C. were covered. Whether it was skills training and education, partnerships and business opportunities, or project intelligence, there was more than enough on the agenda to keep attendees busy, no matter what sector was of interest to them.

Delegates were not only diverse in terms of the business sectors they represented but in also in terms of the countries they travelled from to attend — international delegates from countries like the U.S., the U.K., Asia, Australia and Europe made up about 10 per cent of the Conference. First Nations were similarly well represented with about 10 per cent of delegates being from 45 different First Nations communities.

With many LNG projects getting closer to their final investment decisions, future International LNG in BC Conferences will assuredly attract even more interest. BCSN

December 2015/January 2016 BC Shipping News 49

CARGO LOGISTICS Informa brings the entire North American supply chain under one roof in San Diego and Montreal

By Peter Hurme, Show Director and Editor, Cargo Logistics Expos

T

wo very successful Canadian shipping and logistics shows under its belt have prompted Informa to expand to the $1 trillion U.S. logistics market with the Cargo Logistics America Expo + Conference to be held at the San Diego Convention Center, December 2-3, 2015 and to continue building upon the market-leading Cargo Logistics Canada Expo + Conference with a third outing in Montreal, QC, February 17-18, 2016.

Cargo Logistics Canada has averaged close to 3,000 attendees, 175 exhibitors and more than 100 speakers in Vancouver, B.C. The Cargo Logistics expos were more directly influenced by a few large-scale industry shows in Europe. Organizers say they identified a void in North America for a true multimodal event that attracted a diverse array of supply chains.

“No matter the size and scope, it seemed to us all that transport, logistics,

“No matter the size and scope...transport, logistics, and shipping events in North America were quite vertical in nature and lacking an annual meeting place for all the stakeholders to connect on mutual synergies...” and shipping events in North America were quite vertical in nature and lacking an annual meeting place for all the stakeholders to connect on mutual synergies,” said Ben Carson, show manager for the Cargo Logistics expos.

San Diego

For the U.S. show, a coalition of industry groups and media stepped forward with deep support, including the venerable National Association of Manufacturers (NAM), Footwear Distributors and Retailers Association

Cargo Logistics America will be held at the San Diego Convention Center, December 2 to 3, 2015.

50 BC Shipping News December 2015/January 2016

(FDRA), International Refrigerated Transportation Association (IRTA), APICS, a group of U.S. Midwest-based cargo owner associations, and the Los Angeles Air Cargo Association, among others.

“Cargo Logistics America is open for all supply chains, including ours, and we behalf of our members,” said Matt Priest, President, Footwear Distributors and Retailers Association.

The show’s sponsors and exhibitors represent an all-inclusive cross-section, with organizations like the Port of Long Beach, CSX, Global Container Terminals, Freightsnap, Oakland Global, Dematic, Los Angeles World Airports, Mercury Gate International, Norfolk Southern, XPO Logistics, Toshiba, Raymond Corp, Terex, Thermo-King, and presenting sponsor, Port Miami.

Cargo Logistics America’s 35-plus seminars, show floor presentations, and keynotes will cover timely industry topics, ranging from the importance of intermodal rail for port productivity to the “Uber-ization” of logistics helmed by the Wall Street Journal.

Featured keynotes include: Stephen Flowers, President, Global Freight Forwarding, UPS; Drew Greenblatt, President and Owner, Marlin Steel Wire Products and Executive Committee Member, National Association of Manufacturers (NAM); and Robert Voltmann, President and CEO of the Transportation Intermediaries Association.

CARGO LOGISTICS Other seminars include: • The Internet of Things: Oppor-tunities and Impacts on Logistics: Technology is changing the way your company and your customers do business. Learn about the unprecedented ways the connected world is transforming the connected logistics enterprise by enhancing operational efficiency, improving safety and security, transforming the customer experience, and driving new business models, while at the same time creating new challenges and raising new questions for policymakers at every level of government.

• Who Will Move the World? A roundtable discussion on the impending talent gap crisis and the pressing need to develop the next generation of logistics professionals.

• The Future of Global Ocean Shipping: There are many major factors influencing the future of global ocean shipping, including: megaships, mega-alliances, shifting trade lanes and sourcing, freight-rate pricing debates, carrier profitability, increased regulation, the Panama and Suez canals, and much more. Industry experts will discuss these trends, the forecasts and the future of this ever evolving industry.

• The New Food Safety Regulations – Are you ready? The Food Safety Modernization Act (FSMA) could be a game changer if you are not prepared. The transportation/sanitation rules are set to be released March 2016 — is your supply chain ready? In this seminar, experts will review the draft regulations specifically related to trucking and rail. At the end of the seminar, you will be aware of the requirements and the consequences and learn what other companies are doing now to hit the ground running.

Montreal

The Montreal show in February has the support of Canada’s major industry groups including SCMA, CIFFA, CITT, Manufacturers and Exporters of Quebec, APICS, and the Freight Management Association of Canada.

The Canadian National Railroad is the show’s exclusive Welcome Reception and Presenting Sponsor, as well as the showcase attraction on the tradeshow floor, with an 800-square-foot booth to greet the 3,000+ attendees expected to attend.

Cargo Logistics Canada sponsors and exhibitors also represent the diversity of modes and supply chains, with the major support of companies like Canadian Pacific, CargoM, Port of Montreal, HUB Group, Vancouver Airport Authority, Westjet, Air Canada, Ashcroft Terminal, Mediterranean Shipping Company, Halifax Gateway Council, Ryder Material Handling, Hewitt Equipment, and BNSF Railway.

Notable keynote speakers include Claude Mongeau, President and CEO, CN, Najim Shaikh, Vice President, Mediterranean Shipping Company, and Sylvie Vachon, President and CEO, Montreal Port Authority.

The show will also feature specialized summits focused on Commodities and Cold Chain, Distribution Logistics, and Port Productivity.

Individual seminar topics in Montreal will include: • Pharmaceutical Supply Chain Trends and Best Practices: Transporting healthcare products includes complex logistical methods to maintain the often temperature-sensitive shipment’s integrity. It requires specific equipment, storage facilities, harmonized handling procedures, and, above all, strong co-operation among the cold chain partners. Learn from ‘the masters’ about best practices, the latest Canadian Regulatory requirements, security and cold chain technology

Cargo Logistics Canada runs from February 17 to 18 at tThe Palais des Congres de Montreal.

trends, and remote shipping strategies, as well as the IATA CEIV Pharma certification program and its impact on this crucial industry.

• Land for Logistics: As cargo volumes increase, there are increasing demands on distribution and warehousing space.

A panel of experts and customers discuss the processes, strategies, and challenges of locating and developing industrial land for distribution and logistics operations.

• Exploring Arctic Corridors and Gateways: What is the real potential of the Arctic shipping routes and what is the significant role Canada will play? An expert presenter will explore the future of the North American Arctic Corridors and Gateways and show us the opportunities on the horizon.

• Air Cargo 2020: A Clear Vision: Where is the air cargo industry today and where do we expect to be in 2020 – only four short years away? Executives from the air cargo sector will speak to their experiences and expectations on subjects as far-ranging as eAWB, air cargo security (here and around the world), bigger aircrafts, and the first/last mile.

At the end of this discussion, participants will have a better understanding of the challenges and opportunities created by technology, the changing regulatory environment, and infrastructure and capacity.

Seminars to both Cargo Logistics events can be purchased à la carte, or a with an affordable VIP pass that gains delegates entry to all of the show’s content and networking functions.

The large tradeshow floor’s registration price is only $25 and is free with seminar purchases.

The organizers said they selected the Southern California venue for Cargo Logistics America given the two busiest seaports in the Americas — Long Beach and Los Angeles — are situated in the region, coupled with the popularity of sunny San Diego as a destination. For the Canadian show, Montreal is a global centre of trade, business and culture, with a major seaport and is a significant hub for the aerospace industries.

Both shows feature well-attended networking receptions and offsite tours, plus the added draws of two popular cities — San Diego and Montreal — that are natural destinations unto themselves.

The Cargo Logistics America Expo + Conference will also return next year, November 30 to December 1, and will be held at the Long Beach Convention Centre.

For more information and to register, exhibit, or sponsor at either, or both shows, go to: www.cargologisticsexpos.com.

December 2015/January 2016 BC Shipping News 51

MANUFACTURING

Taking Kobelt to new heights

I

t’s been almost three years since Jack Kobelt sold his company to Bow River Capital in February 2013. When Jack retired at the age of 83, he had built the Kobelt brand into a globally recognized manufacturer of hydraulic steering systems, electronic controls, and propulsion control systems that were second to none.

Today, the company is being taken to even higher levels of recognition under new ownership. “First and foremost, we’ve recognized that the company is all about guiding and controlling movement,” says Bockhold of the transition. “We’ve divided the product line into segments — controls, steering, and brakes (and since then, have added thrusters and stabilizers with the acquisition of Keypower Equipment and Accu-Steer) to allow for greater focus.”

And that’s just the start of the changes being seen at Kobelt.

Background

on that in terms of structure, systems and documentation.” systems for propulsion control in both mechanical and pneumatic environments. Over the next four decades, Kobelt developed products such as push-pull controls, pneumatic controls, hydraulic steering systems, and electronic control systems.

While the initial focus was on marine vessels, Jack introduced bronze and stainless steel disc brakes which became popular with the oil and gas industry for service and drilling rigs, a market that continues to generate significant business on Kobelt’s order book.

Transition

“Bow River Capital is unique in the private equity world,” said Bockhold. “They look for service and manufacturing companies with good brand names where they can bring in some of their expertise to allow the company to grow. Jack did some incredible things and Bow River is building on that in terms of structure, systems and documentation.”

Bockhold, a part-owner along with Mark Chesley and Dean Yule, has started to implement those changes with the goal of creating greater efficiencies. “We’re still carrying on Jack’s legacy of high quality products but now we are re-evaluating some of the processes and putting a structure to allow us to continue product development and refine product lines.”

Photo: BC Shipping News

Jack Kobelt started working out of his garage in 1962, designing, manufacturing and assembling products and components. The initial product line started in the early 1960s with mechanical and pneumatic controls for marine vessels, including actuators, control heads, air cylinders and various other parts and components. The 900 series actuator was an early success, with some units still being used 30 to 40 years later.

From its inception, Kobelt has used bronze extensively throughout all parts and components to ensure product longevity. By 1967, Kobelt had just under 100 products, and could supply complete

“Jack did some incredible things and Bow River is building

One of the first things you notice on a tour of Kobelt’s facilities is the signage reminding staff of safety and customer satisfaction.

52 BC Shipping News December 2015/January 2016

A key change that was initiated quickly was the installation of a new ERP (“Enterprise Resource Planning”) system that ties in the production, the inventory, scheduling, sales, accounting and customer relations management. Now, all staff are able to access information from one source to provide for better controls and better costing. “It took about six months to set up,” said Bockhold. “There are 28,000 unique parts within the Kobelt company and this allowed us to get a better handle on everything we had.”

Another change implemented quickly was to build up the sales team. “When we bought the company, we had an industrial brake line, then we had controls, and then steering. The tie-in was the castings. Now, we have an industrial division and a marine division and we’ve divided the product lines into segments — controls; steering; brakes; and since then, we have added thrusters and stabilizers.”

This structure allowed Kobelt to assign a business development manager for each product line that works closely with an engineering manager for the respective line.

Coupled with getting the in-house team strengthened, Bockhold also turned his attention to the distribution network for Kobelt products. “Jack built a great reputation internationally,” he said. “with a really good distribution system in place globally and we’re building on that. First though, we had to go through and filter out those who weren’t aligned and focus on the ones with the technical and service capabilities, and who were actively marketing the products.” Trimming the distribution list down from over 400 to just 122 key partners, Kobelt now has a system in place to actively support distributors and their dealers. “We work very closely with our key partners and we’re seeing good success with this new strategy,” said Bockhold, even noting annual conferences for distributors and dealers to strengthen product knowledge, network and create a more holistic approach to sales.” And while Kobelt under Jack relied almost exclusively on distribution networks, the company is now reaching out to the local

MANUFACTURING

The future

With more than 50 per cent capacity still available for use in the Kobelt building, Bockhold sees growth through acquisitions, developing new products and streamlining some of the old processes to allow for greater efficiencies. As a vertically integrated company — i.e., producing everything in-house — Bockhold sees some efficiencies that can be achieved by a greater focus on the strengths of the company and out-sourcing some tasks that others can do more cost-effectively. In addition, Bockhold sees further efficiency and quality gains that can be achieved by moving away from die casting on certain products. “Die casting is the perfect solution in many cases. However, we have a number of components that are low volume items yet our casting process forces us to run larger quantities. With the efficiency and repeatability of our CNC machining processes, we intend to transition such products to be machined from solid stock.”

Future acquisitions are also under consideration. “We acquired Keypower Equipment in November 2014 and Accu-Steer in August 2015 and both have fit really well within Kobelt,” said Bockhold. “From a product point of view, Keypower fits perfectly — it allows us to move toward the integration of a full package.”

Both companies have moved into the Kobelt building, allowing for manufacturing synergies (Keypower was outsourcing their manufacturing which can now be done in-house) and leveraging overhead and administration costs which has helped Kobelt to become more competitive in their bids.

“Our plans definitely include growth and the consideration of more acquisitions,” noted Bockhold. “But it has to be a strategic fit. If it allows us to use existing capacity and it’s focused on guiding and controlling motion, then we are actively seeking opportunities.”

In the meantime, Kobelt has been busy with new product development and the upgrade of existing products. “We’ve assembled one of the strongest teams I’ve ever seen with such significant technical experience and knowledge,” said Bockhold, announcing that the team is in the midst of testing a new steering system. “Collectively, we felt there were too many cumbersome features for hydraulic steering functions, so we have simplified the design into fewer and more repeatable components. We’ve done this by reducing the number of components and combining certain features into manifolds that were previously all separate pieces. The system is easier to install, easier to service and maintain, and more reliable. It allows for more consistency. We’re taking the same approach on brakes, controls and all other products we manufacture.”

When asked what he felt the most significant change over the past three years has been, Bockhold was quick to respond that adding the sales and engineering support has allowed for an increase in customer service. “It’s the customer service aspect of the business that is central to the transition,” he said.

“Responding with complete information and making the customer a priority. We’ve really strengthened the resources and the knowledge base that is available to customers.”

While it’s only been three years since Jack left Kobelt, the company that bears his name is not only carrying on his legacy of innovation but is also being positioned to expand in new ways that will assure the Kobelt name continues to stand for quality for years to come. BCSN

Photos: BC Shipping News

market to sell direct on larger projects that require extensive engineering and project management. This has assisted in securing work with BC Ferries to supply steering systems for the Queen of Oak Bay and the Queen of Surrey, for example.

That approach has also shifted Kobelt’s focus from supplying single parts to developing full systems for customers. “The overall strategy on the marine side moving forward is that we’ve still got our parts and component business but we’re starting to push more toward providing integrated systems. We have thrusters and propulsion controls and steering so that we can now supply a fully integrated package.”

Left to right: Keivan Ashouei, Dean Yule and Paul Barber, just a few of Kobelt’s engineers who work on new product development.

Dave Bockhold stands beside Kobelt’s newest brake design that is being used on oil rigs.

December 2015/January 2016 BC Shipping News 53

Photo: Dave Roels

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Aluminum Passenger Ferry Listing # CV266 / $188,000 OBO Built in 2008 by Sylte Shipyard, Maple Ridge, B.C. • Seating capacity: 65 people plus 3 crew • LOA: 65 feet / Beam: 12 feet • Tonnage: 43 gross tons • Speed: 23 Knots approx. (reported) • Power: Daewoo Diesel – 480hp

Remarks: This vessel is reported in very good condition. This is an exclusive listing with Harlow Marine. For an immediate inspection please call our office at 604-530-2657. MOTIVATED SELLER.

54 BC Shipping News December 2015/January 2016

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