History Lesson: The last paddle steamer
Container and Bulk Shipping: A ship owner’s challenge
Legal Affairs: Protection of Canada’s Arctic Waters
BC SHIPPING Commercial Marine News for Canada’s West Coast.
Volume 7 Issue 1
www.bcshippingnews.com
NEWS February 2017
Cargo Logistics Data pipelines of the future
Industry Insight Fasten your seatbelts...
Key drivers for 2017 FEB
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Plus: Canada’s Gateway Ports: Title holders & contenders February 2017 — BC Shipping News — 1
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Contents
NEWS
February 2017 Volume 7 Issue 1
Cover Story
24
40 Cargo logistics
Data pipelines of the future By Colin Laughlan
43 Legal affairs
Protection of Canada’s Arctic Waters By Peter Swanson
46 Safety training Chinese fire drill By John Lewis
48 Ferries 7
Editor’s note
8
In brief
By Jane McIvor
Industry traffic and news briefs
12 Industry insight
Fasten your seatbelts... Key drivers in 2017 By Robert Lewis-Manning If you are one for excitement, uncertainty and change, then 2017 should be a banner year for you... Lewis-Manning offers insights and predictions for the maritime industry.
18 History lesson
The Samson V The last paddle steamer By Lea Edgar
20 Maritime law
Law firm merger a boon for Vancouver’s maritime industry
24
Ports & terminals
Canada’s Gateway Ports Title holders and contenders By Darryl Anderson and James Frost
33 Transportation
Zero-emission, high-speed commuter ferry has a promising future
50 Ferries
First of three Salish-class BC Ferries’ vessels arrives on the West Coast
51 Technology
Transport Canada approves ACO Marine sewage treatment units for use on Great Lakes
52 Marine industry
Local maritime industry pitches in to give Hanjin crew a Merry Christmas
Willis Towers Watson: Navigating risk in the transportation sector
35 Shipping
12
Container and bulk shipping A ship owner’s challenge By Syd Heal
38 Hatches
Effective hatch-cover testing By Christopher Loat
40
On the cover: The Cornelia Maersk at Fairview Terminal, Prince Rupert (photo: Lonnie Wishart); above: DP World’s Centerm Terminal (photo: Dave Roels); right: containers moving through Port of Vancouver (photo: Dave Roels); left: Robert Lewis-Manning. February 2017 — BC Shipping News — 5
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February 2017 Volume 7/Issue 1
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Proud member of: 300 – 1275 WEST 6TH AVENUE, VANCOUVER, BC V6H 1A6 T: 604-893-8800 / F: 604-708-1920 E: JANE@BCSHIPPINGNEWS.COM 6 — BC Shipping News — February 2017
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EDITOR’S NOTE
Photo: Dave Roels
With change comes opportunity
R
egular readers of BC Shipping News will know by now that I love clichés. Actions speak louder that words; you can’t judge a book by its cover; what doesn’t kill you makes you stronger...take your pick, you’ve probably seen them in this editor’s note at one point over the last six years. Here’s another: With change comes opportunity. While it’s an appropriate cliché that addresses current events within industry, governments, and business in general, it’s only half the story. There are also challenges, threats and downright scary scenarios that we presently face. So here’s another cliché to balance it: To be
forewarned is to be forearmed — i.e., if you’re informed, you can be prepared. And that’s what BC Shipping News is all about — providing articles that will keep you informed, allow you to explore new ideas and concepts, and investigate prospects that will benefit your business. The articles this month will do just that. I strongly recommend paying close attention to Robert Lewis-Manning’s ‘Key drivers in 2017.’ Robert has identified the issues that are necessary to know and understand if you have any notion of conducting business in British Columbia. From evaluations and forecasts of industry sectors, to geopolitical considerations, and upcoming regulations and
legislation, this is a very insightful article and one that will go a long way in allowing you to identify opportunities in today’s maritime industry. Another article worth noting is Colin Laughlan’s review of how the electronic capture and extraction of shipping data will undergo a global revolution in the not too distant future. For cargo logistics professionals, this is a very important article — your business practices are about to change. But, like the title says, with change comes opportunity. So read, learn, and use your new-found knowledge to prepare for whatever comes next. — Jane McIvor
Cyber-enabled ships: ShipRight procedure With autonomous ships likely to enter service soon, LR has set out the ‘how’ of marine autonomous operations in a new ShipRight procedure guidance.
Read the guidance at www.lr.org/cyber
Working together for a safer world Lloyd’s Register and variants of it are trading names of Lloyd’s Register Group Limited, its subsidiaries and affiliates. Copyright © Lloyd’s Register Group Limited 2016. A member of the Lloyd’s Register group. Half page BC shipping_CYBER_060516.indd 1
February 2017 — BC Shipping 11/07/2016 News — 13:39:10 7
INDUSTRY TRAFFIC
Seaspan adds to the leadership team Paul Hilder, Vice President, Marine Operations
As a member of Seaspan’s senior leadership team, Paul is ultimately accountable for overseeing the operational efficiency and safety of all vessels and marine crews. Working in collaboration with Port Captains, Dispatch and the Regulatory & Compliance departments, Paul will also oversee and monitor ongoing operational and training issues in order to reduce potential risks and liabilities to the company. Paul has a long, storied past in the B.C. marine industry. He re-joined Seaspan Marine in February 2016 as Director of Operations. Prior to that, he worked at Seabridge Marine Services in its International Chartering and Operations divisions where he specialized in heavy lift project cargoes and semi-submersible jobs. In that role, he also managed all new build deliveries and specialized in marine transports. From 2008 to 2012, Paul was a Project Supervisor (Vessel Operations) with Seaspan. And, from
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2005 to 2008 he was back at Seabridge Marine as Operations Manager. “Paul has over 30 years experience in marine operations and is an invaluable part of the team,” said Bart Reynolds, President, Seaspan Marine. “I’m very happy he’s back in the Seaspan fold and look forward to working with him to ensure the continuous improvement of the safety and efficiency of the company.”
Tony Tinto, Vice President, Planning & Estimating
Tony joined Vancouver Shipyards (VSY) in 2006 as a Project Manager, before moving over to affiliate company Vancouver Drydock in 2007 in a similar capacity. In 2012, Tony returned to VSY as Director, Planning & Production Control, and was appointed to the role of interim Vice President, Planning & Estimating in November 2016. Prior to his arrival at Seaspan in 2006, Tony worked as a Design & Engineering Manager for Westbay SonShip & Yachts. As part of the Seaspan Shipyards senior leadership team, Tony is responsible for providing leadership and direction on network planning, detail planning and production control, as well as estimating for new ship construction. Tony holds a diploma in Civil Design from (BCIT), a professional diploma in Yacht Design from the Westlawn Institute of Marine Technology and an Executive Education certificate from the University of British Columbia’s (UBC) Sauder School of Business. “As a senior management professional with extensive planning/construction and project management experience, Tony is a results-oriented leader with a proven ability in the management and execution of significant design and shipbuilding contracts,” said Brian Carter, President, Seaspan Shipyards. “I’m happy to announce his official promotion today and look forward to continuing to work with him.”
Photo: Dave Roels
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LETTERS Naval architect weighs in extinguishing systems To the Editor, In the December 2016/January 2017 BC Shipping News issue, “The ‘ungoverned space’ of marine safety” article asserts there are two existing ships or boats extinguishing systems broad categories: sprinkler and gas systems. This article is of great interest. However, it seems the author forgot or neglected to mention one other category: the aerosol. The aerosol extinguishing system has existed since the early 1990s but it was not then well known to the marine community. In fact, it is only recently that aerosol technology has been adapted for marine application. The marine industry has recently shown much interest with this technology since its approval by Transport Canada in December 2013. Many installations have been made throughout Canada with much satisfaction on the part of shipbuilders and ship owners from unique advantages. As for the operating principle, the aerosol is propagated and evenly distributed in the compartment to protect using the momentum generated during the transformation process. Unlike gaseous agents, the total flooding effect is achieved without increasing the pressure in the protected volume. Fire extinguishing is accomplished by the interruption of the
chemical chain reactions producing free radicals and not by the depletion of oxygen, remaining safe for human. The aerosol is not kept under pressure so there is no risk of explosion, no catastrophic effect due to high pressure bottles and no leak is possible. Also, the product doesn’t need a specific space to be stored, neither a piping system, since the extinguishing product is stored in small boxes located inside the room protected. The weight and the place saved on ships give an important advantage. This translates into more payload and less deadweight. The extinguishing product is composed of different ingredients. The main ingredient is Potassium Nitrate. The product is nonconductive, noncorrosive, nontoxic and has no effect on equipment. Also, the chemical product has zero ozone depletion potential, zero global warming potential and, after release, a negligible atmospheric lifetime. As far as for FirePro products (ULC and IMO approved), there is little to look at for 15 years after installation and normally nothing to replace nor remove for testing. This information may be very valuable to shipbuilders and ship owners. Regards, Paul E. Barbeau, Eng. Naval Architect, NAVTECH INC., Quebec
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INDUSTRY TRAFFIC
Lloyd’s Register and TWI launch two new projects to advance take-up of additive manufacturing
L
loyd’s Register (LR) and TWI are calling for partners to join two new global collaborative projects focused on two additive manufacturing challenges facing the industrial sector. “Achieving Regulatory and Code Compliance for Additive Manufacturing” and “Joining of Metallic Additively Manufactured Products and Materials” are expected to attract considerable interest from companies worldwide, as these new projects will further explore challenges uncovered from LR and TWI’s first joint industry project, “Certification of Laser Powder Additive Manufactured Components for Industrial Adoption in the Energy and Offshore Sectors.” Additive manufacturing, also referred to as 3D printing, has already been widely adopted by the aerospace and medical industries due to its ability to create complex and customized metal parts with not only a high level of precision, but also with reduced weight and high material utilization. Even with the current market pressure in the maritime and energy industries, industry players continue to research, plan for and adopt additive manufacturing technologies for the production of metal parts — exploiting benefits such as weight reduction and the ability to print spare parts on demand. What remains unexplored is the link between additive manufacturing and compliance with standards and regulations that are often used in safety-critical pieces of equipment, such as
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the American Petroleum Institute code (API), the American Society of Mechanical Engineer’s (ASME) Boiler and Pressure Vessel Code, and Europe’s Pressure Equipment Directive (PED). “Achieving Regulatory and Code Compliance for Additive Manufacturing” will investigate the routes to regulatory compliance of parts selected by project sponsors, and will produce data and assessment criteria for the introduction and acceptance of parts through third-party inspection. This will give them a head start on their competition by receiving technical services and support covering design and manufacturing through to testing and inspection. The second project, “Joining of Metallic Additively Manufactured Products and Materials” will concentrate on filling in the real-world gaps (for example, controls, data, testing, inspection) to enable project sponsors to design, fabricate and put into service structures that are comprised of conventionally made parts welded with additively manufactured parts. Project sponsors will gain the confidence to put parts into service in real-world, challenging operating environments and conditions, which is a significant step forward for industries such as energy, marine and offshore. The projects further involve LR and TWI in the growing AM industry. Both companies are members of several working groups on additive manufacturing approaches and standardizations for industrial equipment and both offer services and support to help clients move from initial concepts and research through to manufacturing and in-service implementation. The owner of LR, the non-profit Lloyd’s Register Foundation, is also funding research programs to address wide-ranging safety challenges relating to additive manufacturing adoption over the coming years. The launch meeting and project presentations will be held on Tuesday 24th January 2017 at TWI, Cambridge, United Kingdom, and also via tele/video-conference. If you’d like discuss these projects in more detail, or for information about additive manufacturing services, please get in touch with the Lloyd’s Register team at additivemanufacturing@lr.org, or the TWI team at jip@twi.co.uk.
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www.samsontugboats.com Photo credit: Dave Roels
10 — BC Shipping News — February 2017
NEWS BRIEFS
Corvus Energy breaking new ground with Orca ESS
I
n less than six months from the launch of Orca ESS, the order book for the next generation battery solution from Corvus Energy has exceeded nine mega-watt hours (MWh). The resounding interest in Orca ESS (Energy Storage System) has been across multiple maritime applications and vessel types — from port cranes to cruise ships. Beyond the technical advances that Orca ESS brings to the industry, Corvus has rewritten the economics of implementing a battery solution for hybrid or all-electric applications. With a step change in cost, the Corvus Orca ESS provides an economical solution that drastically reduces fuel consumption and maintenance costs — all while helping the environment. With a portfolio of solutions that match the varying requirements of different vessels and a very compelling ROI, Orca ESS is expanding into new vessel types. Corvus Energy Air Cooled Module has secured several
orders to implement Orca ESS into new applications such cruise ships, cargo ships, chemical tankers and speciality vessels. Orca ESS affordability now makes it economically attractive to utilize energy storage for these new applications.
Orca ESS — Sets new standards in safety with passive cell-level thermal runaway isolation
Corvus Energy’s next generation Orca Energy Storage System successfully passed the Norwegian Maritime Authority (NMA) Thermal Runaway Propagation Test 1 with its proprietary passive cell-level isolation design. The testing, officially was witnessed by the NMA and DNV-GL and included three tests in strict compliance with NMA circular Propagation Test 1. The Orca ESS design achieves an even higher level of fault tolerance by eliminating the possibility of TR spreading to neighbouring cells within a single module. This industry leading capability is called “cell-level isolation.” Corvus Energy reaches this unprecedented level of safety without the need for an active cooling method, such as liquid cooling, increasing the reliability and safety of Orca ESS without increasing costs. For more information, visit corvusenergy.com.
Innovation Design Engineering Analysis Safety
Escort Tug Analysis N AVA L A R C H I T E C T S A N D M A R I N E E N G I N E E R S
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Computational Fluid Dynamics Escort Tug Hull with Streamlines
February 2017 — BC Shipping News — 11
INDUSTRY INSIGHT Fasten your seatbelts...
Key drivers in 2017 Robert Lewis-Manning President, Chamber of Shipping
I
f you are one for excitement, uncertainty and change, then 2017 should be a banner year for you. Having survived (mostly) two tumultuous commercial years, 2017 could include the ingredients for a recipe of very, repeat very, modest commercial recovery. Before one becomes excessively excited about the potential for a break-even income statement, marine commerce in Canada will need to deal with the uncertainty created largely from pending policy choices both at home and abroad; decisions which may or may not align with the needs of ports and ship owners. Perhaps more than ever before, the marine industry will seize the attention of the public and this unprecedented visibility should be leveraged, but could inevitably be a risk to addressing many of the constraints to its growth within the larger supply chain.
Needless to say, if some of the following predictions prove wholly or partially correct, this year should be particularly challenging for operators, but headed in a positive direction nonetheless. The following drivers are considered the key ones affecting the marine transportation sector in British Columbia in 2017.
The past year was filled with difficult decisions for ocean carriers in an effort to survive...
The commercial market
The past year was filled with difficult decisions for ocean carriers in an effort to survive exceedingly negative commercial conditions. While not a surprise, these challenges were principally driven by
a lethargic global economy, record-low commodity prices, and an over capacity of vessels in most commodity trades. The overly simplistic outcome of this combination of circumstances was a race to the bottom for freight rates that made even the most agile of owner/operators shake in fear of survival, and of course some did not survive. The most prominent collapse that unfolded was in the container sector when Hanjin Shipping filed for bankruptcy protection in August 2016. While not a surprise to industry insiders, Hanjin’s woes did send a shock wave through the supply chain while concurrently, most remaining container liners were forming joint alliances in an effort to find additional efficiencies for asset utilization. The trend towards consolidation in the container market will undoubtedly
Photo: Dave Roels (www.daveroels.com)
The Hanjin Scarlet, one of two Hanjin vessels anchored off B.C.’s coast that continue to serve as reminders of an uncertain container industry market. 12 — BC Shipping News — February 2017
continue in 2017 and the year will see these new alliances learn to function together including solidifying their routes and schedules. Fortunately, the future appears to include slight increases in growth that should outpace new capacity, but more favourable conditions are still distant on the horizon and likely beyond 2018 as the market sheds inefficient tonnage. The dry-bulk market was similarly challenged in 2016 and an inability to scrap older vessel tonnage at a reasonable pace in 2017 will limit growth despite increased exports. In certain commodity trades, Canada will buck global trends and this is especially the case with grain exports that continue to see steady growth beyond five per cent annually and investment in terminal infrastructure. The liquid-bulk forecast includes a continued and concerted effort to scrap older tonnage but it will not be sufficient to help with the recovery of the freight market. On a positive note, the cruise sector continues to enjoy steady growth, bringing more and more tourists to Canadian ports. Canada’s 150th anniversary is expected to increase the attractiveness of Canadian cruise visits as festive activities will be held on all coasts. Further interest in Canada includes projected growth of “expedition” cruising, especially to the Arctic which saw its first major visit in August 2016 with the 32-day sailing of the Northwest Passage by the Crystal Serenity; an unprecedented voyage that was accomplished safely while respecting the unique Arctic environment and social impact on indigenous communities. Globally, the cruise industry is expecting over 25 million passengers in 2017.
One noteworthy challenge that continues to garner significant public attention is the potential impact of vessel noise on iconic and endangered marine mammal species.
The political landscape
It would be naïve to ignore the political landscape in 2017, largely due to the reality that marine transportation will be subject to impacts from an aggressive federal government agenda, a provincial election in British Columbia, and of course changes in the U.S. as a result of its recent election. In Western Canada, the federal governments will be focused on the delivery of commitments made in the $1.5 billion Oceans Protection Plan, and these are both numerous and complex. They will include elements of new governance, technology, and regulations designed to plan for and mitigate the risk from commercial shipping and also to meet Canada’s conservation commitments. One noteworthy challenge that continues to garner significant public attention is the potential impact of vessel noise on iconic and endangered marine mammal species. This is an extremely complex situation and the challenges facing these species go far beyond the impact of vessels. Many of the initiatives will also include governance frameworks for closer co-ordination and management with Indigenous People in B.C., and it is yet to be seen how the government
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February 2017 — BC Shipping News — 13
INDUSTRY INSIGHT U.S. trade by the federal government is indicative of the importance of this trading partner and the potential impact on Canada of U.S. protectionist measures, such as an import tax.
Photo: Dave Roels (www.daveroels.com)
Trade-enabling projects
A done deal? The Kinder Morgan pipeline expansion project will likely still be a key issue for the upcoming B.C. election.
will approach this aspect beyond existing initiatives such as the Pacific North Coast Integrated Management Area Framework. The government has established high expectations and its ability to pragmatically meet these expectations will resonate for years. This year will also see continued opposition by a small minority of Canadians to major projects associated with the export of non-renewable energy. This has already manifested in legal challenges to approvals and could spill over to the provincial election. The focus of opposition will be centred largely on environmental issues that have been percolating for an extended period of time. The risk to the industry is a federal government that reacts to unsubstantiated concerns hastily, without developing an evidence base to justify policy decisions. This could result in decisions that are both costly and unnecessarily constrain the operation of vessels and ports.
The trading framework
The past year included substantive progress with the signing of the Comprehensive Economic and Trade Agreement, and a federal government commitment to furthering other bilateral and multilateral trade frameworks. The federal government also expressed its 14 — BC Shipping News — February 2017
intent to invest in trade-enabling infrastructure as part of a 10-year plan and one should expect to see the framework of such a plan in 2017. Indirectly related to this plan will be a policy discussion and potentially decisions associated with the privatization of Canadian ports; an issue that will certainly draw significant and diverse views from users of the transportation system.
Contrasting the optimism surrounding free trade is the potential risk posed to Canada as the new U.S. administration reviews its trade policy... Contrasting the optimism surrounding free trade is the potential risk posed to Canada as the new U.S. administration reviews its trade policy under a President who has vowed to promote U.S. protectionism. How these renewed principals manifest themselves in policy decisions remains unclear but they do add an extra layer of uncertainty that is counterproductive for Canada as it considers investments for the long term. The importance placed on Canada /
British Columbia is blessed with the opportunity to leverage increased trading opportunities in several sub-sectors. These include recent positive announcements for Pacific North West LNG, Woodfibre LNG, the Trans Mountain Expansion Project, and several terminal initiatives that will build world-leading capability and capacity in the bulk and container sector. While some of these projects require additional approvals and investment decisions, they continue to represent the confidence of both the proponents and governments. As these projects mature, the marine industry will face scrutiny and also new complexities to manage the supply chain as efficiently and as safely as possible.
Legislative and regulatory agenda
The federal government has made significant commitments and will likely be aggressive in delivering on those commitments in the second and third years of its mandate. For the marine industry, several pieces of legislation and anticipated amendments will be relevant, including the replacement of the Fair Rail for Grain Farmers Act, and amendments to both the Canadian Transportation Act, and the Oceans Act. The Fair Rail for Grain Farmers Act expires in August so Ottawa is working feverishly to develop subsequent legislation that will establish the relationship between shippers and railways, and this framework may expand beyond grain to other commodities (and maybe containers). It will almost certainly drive further transparency in the supply chain, which should be a positive development. Further on the horizon will be a review and amendments to the Pilotage Act, although this review will not likely result in legislative amendments until 2018 or beyond. Internationally, the Ballast Water Management Convention will come into force in September, and with it, significant technical, operational, and cost implications that will place additional pressures on ship owners. While Canada is not expected to have draft regulations
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February 2017 — BC Shipping News — 15
INDUSTRY INSIGHT in place in 2017, it will need to begin its regulatory process in 2017. Perhaps Canada’s major challenge is the fact that the U.S. is not a signatory to the Convention and finding harmonization will be essential to port state control. Regionally, the regulatory agenda will be packed and will include numerous federally mandated shipping and conservation initiatives, many of which were announced in the Oceans Protection Plan, some of which have the potential to be contentious with certain stakeholders and also challenging to the marine transportation sector. The growing convergence of traditional risk mitigation, conservation planning, and supply chain management will challenge the marine industry to be innovative and to actively engage governments at all levels (federal, provincial, municipal and indigenous).
Wrap-up
This year will not be as devastating commercially but any potential recovery will be slow to gain traction in view of the poor but improving fundamentals
Photo courtesy Port of Vancouver
Challenges and opportunities will present themselves in 2017. B.C. and the shipping industry are ready to meet both.
of supply and demand, and the uncertainties of policy decisions in Canada and the U.S. The marine sector will be inundated with legislative and regulatory initiatives, and in the highly charged political environment of election commitments, there remains a risk of decision makers making poor choices based on incomplete evidence. Likewise, the competitiveness of the Pacific Gateway will become increasingly important and
complex. Our trade corridors, whether land-based or on the sea, must be safe, efficient, fluid and cost-effective and this will not necessarily be the focus of governments. Robert Lewis-Manning joined the Chamber of Shipping in February 2016 following his tenure as President of the Canadian Shipowners Association and a 24-year career with the Royal Canadian Navy. He can be reached at robert@cosbc.ca.
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HISTORY LESSON The Samson V
The last paddle steamer Photo: Dave Roels
By Lea Edgar Librarian & Archivist, Vancouver Maritime Museum
The vessel’s design, while not unique, certainly proved effective in the hazardous waters of the Fraser River.
T
here was a time when the Fraser River was bustling with paddle steamers. While the river is still heavily trafficked today, paddle wheel steam ships have long since disappeared, replaced by the more compact screw propeller vessels. If you wish to ride on a paddle wheeler today, you must board one of the replica ships, such as the MPV Constitution operated by Harbour Cruises in Vancouver or the MV Native operated by Paddlewheeler Riverboat Tours in New Westminster. But to truly gain an authentic experience, visit the Samson V Museum, which preserves the last operating stern wheeler in Western Canada. The first Samson started operating in about 1884. At the time, the residents along the shores of the Fraser River were constantly dealing with the debris the freshet brought every spring. It would ruin fishing nets, endanger navigation, and damage docks and bridges. The local communities successfully petitioned the government and the first Samson snagboat, the smallest of the five vessels, was put to work. Three more ships were created using parts from previous Samsons because, after about 10 years, their timbers rotted out. For example, the Sampson V was built using the engines from Samson IV. To stop the constant rotting and the need to construct a new vessel every decade, the Samson V was built with pre-cut, pressurized, creosoted timbers that deterred the rotting. Such efforts proved effective, as she has survived in the water until this day. 18 — BC Shipping News — February 2017
The Samson V on the Fraser River near New Westminster, March 17, 1938. VMM item number LM2016.999.012.
The Samson V was built at Star (Mercer’s) Shipyards and launched on September 3, 1937. She was christened by Margaret Reid, the daughter of Thomas Reid, Member of Parliament for New Westminster. The vessel measures 35 metres long with a maximum breadth of 9.8 metres. The paddle wheel itself measures 5.3 metres in diameter, 4.72 metres wide, and has 15 individual paddles. She travelled at a maximum speed of 10 knots, but her average speed was seven knots. Samson V generally carried a crew of about 11, including three officers (master, mate, and chief engineer), and eight crewmembers (fireman, winchman, oiler, cook, steward, bosun and two deckhands). The impressive steam winch on the foredeck of the vessel is perhaps its standout feature — it could lift from 48 tons to 72 tons. The vessel’s design, while not unique, certainly proved effective in the hazardous waters of the Fraser River. The Samson V continued the hard work of the earlier Samsons by clearing
debris, maintaining navigational aids and government docks, performing surveys, assisting other vessels, and completing other necessary tasks on the river as needed. Part of the success of these sternwheelers was their shallow draft that allowed them to go over sandbars, into the shallows, and over fishing nets. This enabled them to reach areas of the river that other vessels could not. The Samson V also helped dredge the Fraser River so that large ships had access to the various mills and terminals on its shores. In doing so, she greatly contributed to the Greater Vancouver Region’s vital business of the import and export of goods. The Samson V generally worked from New Westminster downstream to the Sandheads lightship and up river above Mission to Vedder and Hatsic and up to Pitt Lake. She could travel about 100 miles in a day. These versatile and varied activities were the central reasons behind why the Samson V not only survived, but actively worked for so many years.
The Samson V chugged along without incident until the 1950s when disaster stuck. On New Year’s Eve, 1954, her berth caught fire. In order to save her, the fire department made the decision to deliberately submerge her. Luckily, this tactic worked and the superstructure and boiler were replaced at Star Shipyards and eventually she was put back into service. She managed to work for another 20 years. Then, in 1979, the federal government announced that the Samson V, the last of its kind on the Fraser River, was to be auctioned off. With this announcement, many maritime history enthusiasts became concerned for the vessel’s future. A group was formed in Mission with the goal of obtaining the Samson V to create a Fraser River Heritage Park for the community. A further 14 communities on the Fraser River also lobbied to acquire the vessel. The decision was made, however, to sell the Samson V to the City of New Westminster for one dollar, with the city agreeing to preserve the vessel as a museum. The museum opened in October 1983. In September 2017, it will be the Samson V ’s 80th birthday. This is a truly remarkable feat thanks to the vessel’s design, proven usefulness, and finally to the passionate champions of maritime history who chose to fight for its preservation. As the only intact and floating wooden sternwheeler in North America, the Samson V lives on to educate, entertain, and give us a glimpse of early life on the Fraser River. Lea Edgar started her position as Librarian and Archivist for the Vancouver Maritime Museum in 2013. She can be contacted at archives@vanmaritime.com.
The Samson V lifting logs out of the Fraser River, ca. 1970. VMM item number LM2016.999.015.
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MARITIME LAW
Law firm merger a boon for Vancouver’s maritime industry
T
he merger between Bull Housser & Tupper LLP (Bull Housser) and global law firm Norton Rose Fulbright Canada LLP — effective January 1, 2017 — is a significant step in the development of Vancouver as a global maritime hub. Norton Rose Fulbright is one of the largest legal firms in the world (within the top three in Canada and top 10 in the world). “The big difference between us and other firms,” said Harry Theochari, Global Head of Transport, “is that we have developed our expertise within the maritime industry over many years and are able to cover the full range of legal advice on a global basis.” Now, with Vancouver-based Bull Housser coming under the Norton Rose Fulbright banner, the firm’s presence on Canada’s West Coast not only contributes to the development of Vancouver as a true international maritime centre, it speaks to the recognition of Vancouver’s growing importance to the world’s shipping community. “The move to Vancouver for Norton Rose Fulbright confirms that Vancouver has the potential to become a leading global maritime capital,” said Kaity Arsoniadis-Stein, Executive Director of the Vancouver International Maritime Centre.
Norton Rose Fulbright is one of the fastest-growing law firms in the world.
Background
Norton Rose Fulbright is one of the fastest-growing law firms in the world. Factoring in Bull Housser’s 90-plus complement of lawyers, the firm now boasts more than 3,800 lawyers in more than 50 offices around the world. “Two hundred of those lawyers do nothing but shipping,” Theochari told BC Shipping News. “These are hard-core shipping people — specialists in litigation, finance, and regulations.” As Global Head of Transport for Norton Rose Fulbright, Theochari’s portfolio also includes an additional 200 lawyers dealing with aviation and rail. 20 — BC Shipping News — February 2017
Welcoming Harry Theochari to Vancouver (left to right): Yvonne Rankin Constantine and Kaity Arsoniadis-Stein (Vancouver International Maritime Centre), Gary Constantine (Steelhead LNG), Harry Theochari (Norton Rose Fulbright) and Aly Karmali (Royal Bank of Canada).
In addition to the field of transport, Norton Rose Fulbright is well-known for their expertise in the fields of energy, mining, infrastructure, financial services, real estate, life sciences and healthcare, and technology and innovation. They were named the E&L Law Firm of the Year in 2015 by Chambers Canada and, in that same year, achieved Band 1 (i.e., top tier) recognition from Chambers Global in Dispute Resolution (Alberta and Quebec); Energy: Oil and Gas; Employment and Labour; and Transportation. With the merger between Bull Housser and Norton Rose Fulbright, the firm now has a pan-Canadian presence — combined, more than 650 lawyers work in offices in Calgary, Toronto, Ottawa, Montreal, Quebec City and Vancouver Bull Housser has an equally impressive background. Its 126-year history of legal practice in British Columbia has resulted in Chambers Canada’s 2016 Leading Firm award in the areas of Aboriginal Law; Corporate/Commercial: British Columbia; Dispute Resolution; Healthcare; PPP & Infrastructure; Real Estate: B.C.; and Shipping Law. They were also awarded the Legal 500 Canada 2016 award for Leading Firm in many of the same categories. And the list of accolades and recognition doesn’t stop there — 40 lawyers in 35 practice areas
were recognized on the Best Lawyers in Canada list for 2016, with five being selected as “2016 Lawyer of the Year” in their respective areas of practice. It was in September, 2016, that Bull Housser and Norton Rose Fulbright announced their intent to combine forces. In a joint press release, the companies pointed to complementary strengths in their areas of practice, cultural compatibility, and a shared vision to maintain a client-centric focus. The release further noted that “For clients, innovative service offerings, improved efficiencies through advanced technology and systems, and access to leading legal advisors around the globe, are just a few of the advantages they can now enjoy.”
“...It was apparent to us that Canada had a lot of potential when it came to shipping.”
Think global, act local
In truth, the idea of setting up a Vancouver location was not a new one for Theochari. “When I first came to Vancouver in 1998,” he said, “I was very interested in the dynamics with Asia, which was developing very quickly. It was apparent to us that Canada had a lot
Shelley Chapelski, Vancouver-based maritime lawyer now representing Norton Rose Fulbright.
of potential when it came to shipping.” He noted that, in those days, their focus was more on Canada’s trade with Japan and Korea. “There were huge opportunities, and not just to do with Canada’s mineral resources — there was also significant growth in the trade of grains and other food stuffs.” Norton Rose Fulbright altered their strategy in 2002 however. “All of a sudden, China came from nowhere,” he said. “Between 2002 and 2008, we were so busy with China that we had to temporarily shelve other plans to focus our efforts on that market. Our shipping practice increased 10-fold during that time.” Fast forward to 2011 and, Theochari — citing a CitiBank report that forecasts the largest trade corridor in the world by 2030 will be between “advanced Asia” (China, Korea and Japan) and “developing Asia” (Indonesia, Malaysia, Thailand, Vietnam) — knew the timing was right to revisit their earlier strategy. “Vancouver’s location means it is a key port for Canada to be able to benefit from the growth of the Asian markets,” he said. “China’s Belt and Road Initiative, for example, has a budget in the range of $8 to $11 trillion that will be spent on infrastructure development, especially focused on trade routes.” Theochari was quick to point out that it’s not just China but the entire South East Asian region that has incredible potential. “Indonesia is another good example. They have a very large and a very young population with lots of demand for raw material and food stuffs. As far as Canada is concerned, Vancouver is the place to be if you want to participate in any way in that market.” So while Theochari had always been keen to do something in Vancouver, he
found a perfect fit in Bull Housser. “A significant part of Bull Housser’s work is in the shipping sector and they have a great global reputation so it made a lot of sense for the firms to pursue the idea of a merger.” Shelley Chapelski, one of Bull Housser’s leading maritime lawyers, expanded on Theochari’s words. “The benefits for our clients are tremendous,” she said. “Norton Rose Fulbright is one of the two dominant finance shipping firms in the world, and of the two, it is the only one with a global reach and full service. These two factors were of real appeal to us at Bull Housser.” Indeed, Chapelski was already able to cite an example where she drew on the expertise of the Singapore office to
assist a local associate. “While I already know many of the Norton Rose shipping law partners, the merger provides for a higher level of reliability, dependability and trust,” she said. Also present during the interview with BC Shipping News was Brian Devine, Norton Rose Fulbright’s Head of Transport, United States, who confirmed that collaboration between global offices greatly increased their ability to meet client needs. “In the U.S., we have a huge energy practice, for example,” he said. “We represent all of the energy majors who have interests in shipping, and our ability to assist in the many legal jurisdictions around the world is just one of the attributes that is of great benefit to them.”
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MARITIME LAW Chapelski reiterated these thoughts by citing another recent example where Devine’s licence to practise in the Marshall Islands has already helped a local partner who deals with ship transactions around the world.
that will be included in its 2017 edition of the Leading Maritime Capitals report, which is the key reference for benchmarking maritime cities and regions globally,” said Erik Jakobsen, Chairman of Menon Economics.
Another arrow in VIMC’s quiver
“This is global validation
The significance of Norton Rose Fulbright’s interest in Vancouver was not lost on the Vancouver International Maritime Centre who hosted a welcome dinner for the company in early December. With its efforts to encourage shipping companies to set up corporate offices in Vancouver, the presence of such an internationally renowned legal firm will become a cornerstone on their list of assets that make Vancouver so attractive. Through the work done by Executive Director Kaity Arsoniadis-Stein and her team over the last 18 months, there has been a shift in the belief of Vancouver as a maritime hub, as evidenced by a recent report from Menon Economics: “Vancouver will be the only Canadian city and one of three in North America
22 — BC Shipping News — February 2017
of the rising importance of B.C.’s shipping sector...” Jakobsen further noted that: “We now know that Vancouver has strong ambitions to attract companies and become a leading maritime city,” adding that they will be working with the VIMC to collect data in the coming months. In addressing guests at the dinner, Arsoniadis-Stein expressed great pleasure in having both Harry Theochari and Brian Devine in attendance to meet key industry players from Vancouver’s shipping community. “The world has discovered Vancouver!” Kaity said. “Clearly, the leaders of Norton Rose Fulbright have recognized the great potential we have here. From our
reliable banking system, our politically stable governments with AAA credit ratings, and our competitive tax and business advantages, Vancouver has become a location of choice for major international companies.” Arsoniadis-Stein also read out messages from a number of notables, including B.C.’s Premier Christy Clark. “This is global validation of the rising importance of B.C.’s shipping sector, and Canada’s Asia Pacific Gateway, as it signals the beginning of more progressive and innovative legal services to better meet the needs of clients in our province, Canada and around the world,” she wrote. While the Bull Housser name will now only be found only in historical archives — indeed, the only downside to the merger — the benefit of having the Norton Rose Fulbright brand in Vancouver is one that will not only be a key attraction for shipping firms considering a move to Vancouver, but recognizes that Vancouver has a critical mass significant enough to be considered a true international maritime centre. BCSN
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PORTS & TERMINALS Canada’s Gateway Ports
Title holders and contenders By Darryl Anderson, Managing Director, Wave Point Consulting and James Frost, President, MariNova Consulting
W
ith the current sea of red ink in the shipping sector creating an intense competition amongst ports and terminals, it is not hard to liken that industry to a boxing match between current title holders and contenders. Rather than relegating this metaphor to an afterthought, this article will use it to review the march of Canada’s container gateway title holders and their leading contenders.
Title holders — Eastern and Atlantic Canada
Montreal is the largest container port in eastern Canada, handling about 1.44 million TEUs. The port’s biggest strength is its proximity to Canadian and U.S. mid-west markets. It is a oneday truck haul to 40 million consumers and less than two days from 70 million, and is served by two transcontinental railways. Previously a North Atlantic trade-dependent port, its port container markets are now global — Northern Europe accounts for 41 per cent; the Mediterranean region, 20 per cent; and Asia, 17 per cent. Montreal’s strength as a container gateway competitor stems from the unique array of carriers that service the ports in regions like northern Europe, the Med, Asia, and the Caribbean. Interestingly, these carriers primarily operate outside the alliance structure and in some cases, with purpose-built vessels for this trade. Major players include MSC, Hapag-Lloyd, OOCL, Maersk and CMA CGM. Oceanex operates a short-sea service to and from Newfoundland & Labrador. A mostly f lat container growth rate in 2016 has not prevented Montreal from adding infrastructure muscle. This past year, the Port of Montreal commenced construction of a 450,000 TEU-capacity terminal in its Viau section, which will expand capacity to 600,000 TEUs. Another infrastructure initiative to improve the f low of cargo includes a new roadway linking the port 24 — BC Shipping News — February 2017
Montreal’s biggest strength is its proximity to Canadian and U.S. mid-west markets. It is a one-day truck haul to 40 million consumers and less than two days from 70 million... to Autoroute 25. In the future, the Port of Montreal plans to build a new facility at Contrecoeur, about 50 kilometres downstream on the South Shore of the St. Lawrence, where there is already a bulk-handling facility. The Port of Halifax saw an active year in 2016. The most recent performance figures show a 16.1 per cent increase year-over-year of container traffic to the end of the third quarter in 2016. Such a growth rate would bring annual container volumes close to 500,000 TEUs, within 50,000 TEUs of the port’s record set in 2005. Lane Farguson, Communications Advisor with the Halifax Port Authority,
The Port of Halifax.
indicated that “there are several factors contributing to the growth.” He said, “It was during the third quarter of 2015 that the O3 Alliance started calling at the South End Container Terminal, operated by Halterm Container Terminal Ltd.; and the G6 Alliance, now known as THE Alliance, added an outbound call at the Fairview Cove Container Terminal, operated by Ceres-Halifax. These new and expanded services have been in place for over a year now, and those are certainly contributing factors to their growth.” While some container ports were concentrating on infrastructure muscle, the Halifax Port Authority was working on
enhanced dexterity to improve its gateway competitiveness. The web-tracking tool for importers and exporters (www. halifaxgetsithere.com) was updated in 2016 to include several new features designed to make it easier to do business. The enhanced container tracking tool allows clients to monitor a container’s movements by setting up automated email or SMS alerts. Users can enter a single container number or upload a larger list of files and identify the specific alerts they wish to receive. In 2017, the Halifax Port Authority will continue to work collaboratively with partners and stakeholders, including terminal operators, labour, CN Rail, carriers, and all three levels of government to build on the positive momentum achieved in 2016. Farguson further remarked that “We’ve been preparing for the arrival of Ultra-class vessels with capacity over 10,000 TEU for several years. Halifax is in an excellent position to accept these vessels because of our deep harbour, our uncongested port, our connections to regional road and rail networks, our excellent partnerships, and our experienced labour.” With all of this happening at the same time, the shipping industry has signalled the need to accommodate two
“We’ve been preparing for the arrival of Ultra-class vessels with capacity over 10,000 TEU for several years. Halifax is in an excellent position to accept these vessels...” 400-metre Ultra-class container vessels at one time. The Halifax Port Authority announced, during Port Days 2016 last September, that it had engaged WSP Parsons Brinkerhoff to produce a new port master plan. Because it is “only” 666 metres in length, plans include considering an expansion of the South End terminal both south and northwards, as
well as relocate it across the harbour to either Shearwater or the former Imperial Oil lands. How the Halifax fight card plays out in 2017 is still a bit uncertain. Since early fall, there have been reports of either a merger or operating agreement between the port’s two container terminals. If the agreement comes into effect, it could result in all Halifax container cargo
The Port of Montreal.
Photo: Steve Farmer
The Port of Saint John. February 2017 — BC Shipping News — 25
PORTS & TERMINALS being handled at the South End terminal (Halterm) or it being split between the two, whereby post-Panamax ships would be dealt with at Halterm and smaller vessels at Fairview Cove.
“...there is no question
that Saint John can be a competitive gateway for U.S. traffic.” Port Saint John, mainly a bulk port with about 28 million tonnes of cargo moved per annum, is the largest port in Atlantic Canada and one that has been in the container fight game since 1971. Since 1999, Tropical Shipping’s service to Florida and ports in the Caribbean had been a mainstay. In 2014, it attracted MSC, which calls on the port when transiting from Montreal to Freeport, Bahamas, where cargo connects to a myriad of services in all directions. Like any aspiring prizefighter, success does not come without taking some body blows. The port was dealt a setback towards the end of 2016 when Tropical Shipping announced it was leaving and would start calling at Halifax from early January 2017. Nevertheless, Port Saint John remains undaunted and has embarked on an investment plan that will add heft to its ambitions. In 2016, the port announced
a budget of $205 million over seven years to expand the Rodney Container Terminal to 25 acres, 667 metres in berth length, and 15.2 metres depth alongside, to accommodate larger vessels. The port issued a tender for detailed engineering design in late 2016, and expects to award a contract in early 2017. DP World was named to replace Logistec as the operator of the Rodney Container Terminal and port management is excited to have a new partner who shares their vision for the future; intends to invest in new equipment; and aggressively market the facility. As of late October, new post-Panamax cranes had been delivered and will be operational by January 2017. Together with their rail partners, CN and several short lines that connect with CP outside Montreal, Saint John intends to capture a bigger slice of gateway and local cargo. “CN is working with the Port Authority and DP World in Saint John to finalize agreements that will bring additional competitive supply chain services to the hinterland of central Canadian markets in co-operation with our new partners,” said Jean-Jacques Ruest, Executive VicePresident and Chief Marketing Officer at CN. “DP World is excited about operating in Port Saint John. A tremendous number of opportunities for cargo growth and logistics solutions exist within the
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market place,” said Matthew Hoag, Operations and Commercial Director, Americas Region. “Also there is no question that Saint John can be a competitive gateway for U.S. traffic. We intend to develop all of these opportunities with our partners CN Rail and the Port Authority of Saint John.” As Jim Quinn, CEO of Port Saint John said, “the journey we began six years ago is continuing, and new partners that have come to the table are helping us realize the exciting opportunities we see in front of us.”
Title holders — Pacific Region
Port of Vancouver, Canada’s largest and busiest port, trades with more than 160 countries. It is serviced by three intercontinental Class I railways — Canadian National, Canadian Pacific and Burlington Northern Santa Fe — as well as the Southern Railway of BC. The Port offers access to the Trans-Canada and U.S. Interstate highway systems with interconnecting service provided by major trucking lines.
A wily veteran competitor, Vancouver ... is the undisputed container gateway heavyweight title holder in Canada for traffic volume. Port activity supports an estimated $9.7 billion in GDP, $20.3 billion in economic output, and $6.1 billion in wages. Vancouver has experienced continued growth in both bulk and containerized grain and agri-product businesses yearover-year since 2012. In 2016, 23.5 million metric tonnes of grain were handled, up more than six million from 2012. A wily veteran competitor, Vancouver throws an impressive one-two punch with Global Container Terminal (GCT) Inc. and DP World (Canada) Inc. It is the undisputed container gateway heavyweight title holder in Canada for traffic volume. Vancouver’s dominant marine container operator is adding increased foot speed to its arsenal. GCT’s Manager, Market Initiatives and Development, Louanne Wong, indicated, “GCT Deltaport has the largest on-dock
WORKING WITH OUR PORT PARTNERS CN welcomes DP World to Port Saint John CN has a direct rail line to Port Saint John's intermodal container yard. The Port has a bright future as an alternative gateway to the U.S. Midwest and together, we will continue to offer the best service to our global customers.
www.cn.ca/bcsn |
@shipCN | 1-888-668-4626 February 2017 — BC Shipping News — 27
PORTS & TERMINALS
The Port of Vancouver (Westshore Terminal and Deltaport).
intermodal rail yard in North America and is undergoing a redesign that will help increase rail capacity to 1.9 million TEUs, all within its existing footprint.” An essential piece of the project also includes the purchase of 12 state-ofthe-art rubber-tyred gantry (RTG) cranes at the start of 2016 from leading clean-energy equipment manufacturer Konecranes of Finland. The new equipment will boost yard velocity at the country’s flagship container terminal, densifying container handling with the RTGs’ 1-over-5-high and 40-tonne lift capacity. The RTGs will join an advanced equipment fleet equipping GCT Deltaport to be big-ship ready, smoothing any volume surges from the largest vessels calling the facility. Considered among the most sophisticated in their class, the Tier 4f cranes will be hydraulics-free, featuring diesel fuel-saving and active load control technologies to optimize container handling and environmental performance. “Konecranes’ RTGs were selected for their reliability and technological features that support our growth while minimizing our environmental impact,” said Eric Waltz, President of GCT 28 — BC Shipping News — February 2017
Canada. “Not only will we provide customers with cargo delivery certainty through the growth in yard capacity, but we will do so in the most sustainable way possible.”
Late in the first quarter of 2017, GCT will receive delivery of two highefficiency ZPMC megamax cranes, which ... will handle the largest vessels worldwide. The 2017 fight card will continue to see construction activity occur, including equipment arrivals and commissioning. Last June, GCT Canada received delivery of the first six Tier 4f, lowest emission, 40-tonne lift capacity RTGs. The final six will arrive in the second quarter of 2017. In September 2016, GCT received delivery of its fleet of eight; electric Künz cantilevered rail mounted gantries (CRMG). Late in the first quarter of 2017, GCT will receive delivery of two
Photo: Dave Roels (www.daveroels.com)
high-efficiency ZPMC megamax cranes, which, at 23-plus container outreach, will handle the largest vessels worldwide. The fleet will undergo testing before the project goes live in mid-2017, and along with the intermodal yard redesign, will increase efficiency and speed up train handling at GCT Deltaport. While recently fighting in a lighter weight class, the DP World Centerm expansion project will see the marine terminal add more muscle and strength. It plans to increase TEU capacity from 900,000 to 1.5 million. It is scheduled for completion in 2019. At the start of 2016, the proposed Centerm Expansion Project was in the preliminary design phase when technical and environmental studies were undertaken. The proposed project is subject to review and approval by the Port of Vancouver’s project and environmental review process. Cargo diversification is one of the highest priorities for the Port of Prince Rupert. Liquid bulk projects in various planning stages include Prince Rupert LNG, WCC LNG and Pacific Northwest LNG. Breakbulk cargo enthusiasts watched with interest on September 14, 2016, when the Port of Prince Rupert announced it had signed
THE PORT OF PRINCE RUPERT
Prince Rupert is expanding its advantage. Our shippers understand that the Prince Rupert gateway anchors the West Coast’s most efficient trade lane. Combined with our industry-leading reliability and market reach, we provide an exceptional service. With new capacity coming online in 2017 to handle half a million more containers each year, the Rupert Advantage is growing faster than ever.
rupertport.com @rupertport February 2017 — BC Shipping News — 29
PORTS & TERMINALS
Photo: Lonnie Wishart (www.lonniewishart.com)
The Port of Prince Rupert.
a feasibility assessment agreement with SSA Marine and wholly-owned subsidiary Western Stevedoring to explore the viability of a breakbulk and bulk import/ export terminal located on Kaien Island. Bulk liquid export enthusiasts cheered the early January 2017 final investment decision for the Ridley Island Propane Export Terminal. Not to be outdone as a container gateway, the PRPA’s completion of the Fairview Terminal Phase 2 Project will see them move to a higher weight class in 2017. The Phase 2 north container terminal expansion project, launched in the first quarter of 2015, was, by December 12, 2016, more than 75 per cent complete and is on schedule to increase annual capacity at Prince Rupert’s container terminal to over 1.35 million TEUs by the third quarter of 2017. Fairview Container Terminal anchors one of the West Coast’s most efficient trade lanes, served by CN’s North American Class 1 railroad and providing extensive reach into major markets in Canada and the U.S. The expanded terminal will include a second deep-water berth, three additional gantry cranes, and land reclamation to further expand 30 — BC Shipping News — February 2017
the container yard. On-dock rail capacity will also be expanded by densifying the current track configuration, which will be supported by a rubber-tyred gantry crane operation. “Prince Rupert’s success has been driven by its unparalleled geographic position on the Trans-Pacific trade route, high terminal productivity, and consistent low dwell times that have sustained despite our significant growth in throughput over the past two years,” said Maksim Mihic, General Manager, DP World (Canada) Inc. “Strong relationships with our partners from ILWU locals, Port of Prince Rupert and CN Rail have resulted in a reliable and competitive service for our customers.” The next significant milestone for the project is expected in March 2017, with the arrival of three Malacca-max dock gantry cranes to make Prince Rupert bigship ready. Each crane is equipped with a reach of 25 containers wide and can work the largest vessels in the world with a carrying capacity of 20,000-plus TEUs. Port of Nanaimo’s Communication and Public Affairs Manager, David Mailloux, told BC Shipping News: “Building on strong cargo performances
in 2014 and 2015, the Port of Nanaimo, only 30 miles from Vancouver, continues to expand for future cargo movement through Vancouver Island with its partner DP World. Container movements demonstrate steady growth with a 39 per cent lift in 2015 over 2014 and a 22 per cent increase in 2016 over 2015.”
Expansion and improvements of Nanaimo’s Duke Point terminal allows this midisland deep sea port to punch above its’ weight. Expansion and improvements of Nanaimo’s Duke Point terminal allows this mid-island deep sea port to punch above its’ weight. In 2016, the NPA and DP World added Vancouver Island’s first Load-on / Load-off container barge service, complemented by its’ newly acquired 104-metrictonne mobile harbour crane for greater load capacities and diversified cargo handling. The NPA is working on
Eastern contenders
Proponents of the Melford Atlantic Gateway terminal in the Strait of Canso began developing their project in 2005. It is 100 per cent privately financed and now has SSA Marine as its operating partner. In December, the project received an injection of $100 million by SSA and a further $25 million by Cyrus Capital Partners, LP, its original backers, bringing the total investment to $165 million. The facility will sit on 315 acres and be able to handle 15,000-plus TEU vessels. Adjacent to the terminal will be
Source: NovaPorte.ca
Phase II of the Duke Point Terminal Expansion, looking at government infrastructure funding to double the size of the terminal and provide a second deepsea berth by 2020 or earlier. Although there is much focus on container and bulk activity at the NPA, with their considerable lay down areas and berth capacity, they remain committed to providing cost-effective alternatives and short-sea shipping solutions for break bulk commodities destined for the Lower Mainland.
Artist’s rendering of the potential NovaPorte in the Port of Sydney, a 500-acre semi-automated facility.
a 1,500-acre logistics park. A rail spur will be built to connect the terminal to the CBNS short line, which in turn will link up with CN at Truro. The proponents claim to be “ready to go” once they receive a commitment from a shipping line consortium. In the past year, NovaPorte has emerged in the Port of Sydney, on Cape Breton Island. In late December, Sydney Harbour Investment Partners (SHIP)
secured the backing of Ports America, and has proposed to build a 500-acre semi-automated facility, together with a 1,200-acre logistics park served by an upgraded short line presently operated by G&W. The concept is to attract large 19,000-plus TEU ships on Asia-Suez routings and transship cargo destined for Montreal and the Great Lakes region, as well as points on the U.S. East Coast. Cargo would move by rail or vessel. It is
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PORTS & TERMINALS envisioned as a modern, fully automated container terminal, would be able to handle the new Ultra-large container ships up to 22,000 TEUs. The primary focus of PATH as the “hub” is to service the “spokes,” i.e., container handling facilities throughout the Salish Sea area with dedicated cellular barges.
Photo courtesy Port Alberni Port Authority
...in a period of shipping
The Port of Port Alberni.
not clear who would finance the project but it has the backing of a few significant entities, including Bechtel Corporation, China Communications Construction Company (CCCC) and Montreal-based Canderel Group, which would build the logistics park.
Western contenders
The Port Alberni Port Authority strategy to develop a new container terminal in the Alberni Inlet on Vancouver Island puts it on the list of contenders of the container fight card. The Port Alberni Trans-Shipment Hub (PATH),
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line consolidation and new alliance structures, the presence of global container terminal operators active in the Canadian market should not be underestimated.
In the wings
At least three promoters are looking to get into the marine container terminal fight game in Canada. These groups propose building new greenfield terminals to attract the 19,000-plus TEU mega-ships. The promoters must do significantly more than announce their intentions to be placed on the container fight card line-up even to be considered dangerous opponents. However, in a period of shipping line consolidation and new alliance structures, the presence of global container terminal operators active in the Canadian market should not be underestimated. If the presence of contenders in the market helps spur innovation and infrastructure investment amongst existing titleholders, shippers will indeed say the main prize fight, and the undercard was worth watching in 2017. Darryl Anderson is a strategy, trade development, logistics and transportation consultant. His blog Shipper Matters focuses exclusively on maritime transportation and policy issues. http://wavepointconsulting.ca/ shipping-matters James Frost is President of MariNova Consulting Ltd. He is a marketing and business development specialist, experienced in marine transportation, port marketing, container shipping, short sea shipping and ferry operations.
TRANSPORTATION
Willis Towers Watson: Navigating risk in the transportation sector
I
n September 2016, Willis Towers Watson, a leading global advisory company focused on managing risk and optimizing benefits, published their Transportation Risk Index 2016. The study polled 350 senior executives from around the world to gauge perceived risks, threats and opportunities in the global trade market. With permission from Mark HueWilliams, Willis Towers Watson’s Head of Transportation Industry, BC Shipping News is pleased to provide their executive summary, highlighting key findings, including the top 50 risks within five megatrends, all highly relevant to any company involved in the cargo logistics industry.
Profile of respondents / methodology
The Transportation Risk Index 2016 includes a balanced cross-section of opinions from chief executive officers, chief risk officers, chief financial officers and chief human resource officers stationed across six continents. The number of employees and company revenues were also taken into consideration. Questions and interviews focused on five megatrends established from declarations in annual reports to stock exchanges, and through independent qualified research. Respondents were asked to rank these megatrends and their associated individual risks across three timeframes: the present, the next 12 months and the next 10 years.
International trade in goods and services has increased from around $4 trillion in 1990 to $24 trillion in 2014...
Summary of findings
The world economy has surged over the last half century, and that growth has been largely driven by globalization and the consequent increase in trade. International trade in goods and services has increased from around $4 trillion in 1990 to $24 trillion in 2014, according to 2015 data from the United Nations Conference on Trade and Development. This increase in trade would not have been possible without an equivalent rise in the capabilities of the global transportation sector. More than just a mover of goods and people, transport is a key driver of economic and social development. It brings opportunities for the poor and helps economies to be more competitive. According to the World Bank, “transport infrastructure connects people to jobs, education and health services; it enables the supply of goods and services and allows people to interact and generate the knowledge and solutions that foster long-term growth.” The transportation sector’s intimate relationship with the global economy means that the risks faced by the industry are influenced by factors such as increasingly complex markets, transient workforces, disparate regulatory frameworks, the inexorable march of technology and geopolitical shifts. Far from being isolated in silos, these factors interact with each
Megatrend rank order (determined by combined risk score — severity of impact multiplied by ease of risk management).
other in complex ways that are difficult to understand, let alone predict. To better understand the hazards and opportunities inherent in this dynamic landscape, we asked 350 senior executives in the transport industry to rank the greatest threats to their businesses over a 10-year horizon. Participants were surveyed about their attitudes to 50 specific risks from five broad categories, or megatrends: • geopolitical instability and regulatory uncertainty • complex operating models in an interconnected world • digital vulnerability and rapid technological advancement • talent management and the complexities of a global workforce • changing market dynamics and business model insecurity In-depth interviews were then conducted with executives from each mode of transport — across passenger and freight services — to gain deeper insights into the challenges they face. In a world where the so-called Islamic State, Brexit, European migration and U.S. elections are dominating headlines, few may find it surprising that risks from the geopolitical instability and regulatory uncertainty megatrend rate most highly among respondents. The digital vulnerability and rapid technological advancement megatrend runs a very close second, and the effects of changing market dynamics and business model insecurity rank third. The top four rated individual risks in the geopolitical megatrend were the domain of government, regulators or the February 2017 — BC Shipping News — 33
TRANSPORTATION judiciary; indicating that transport providers are at least as worried about a state’s potential to disrupt their business as they are about non-state forces. But there are also clear and influential dissenters. Sir Jeremy Greenstock, the U.K.’s former permanent representative at the United Nations, warns of the perils of ignoring the “fragmentation of the political identity.” He says: “Politics, the construction of states and the organization of human affairs in structures is not behaving as we have been used to for the last 70 years.”
No one size fits all
While the megatrends give a broad overview of the threat landscape, the specific sector and regional data highlight the disparities that continue to make global solutions so elusive for multinational transport providers. In general, the prolonged economic struggles of most shipping lines have made the maritime sector more sensitive to risk than other modes of transport: its top four individual risks are all rated above the air sector’s top risk. Maritime transport providers perceive cyber-threats and data privacy breaches to be their top risks. For aviation, failure of critical IT systems is the biggest concern. However, all transport sectors in all regions share concern about another product of globalization: the growing reliance on third-parties for everything from quality assurance and contract delivery to cyber resilience and the maintenance of corporate reputations. Nowhere has this risk been more clearly illustrated than with the recent bankruptcy of South Korea’s Hanjin Shipping. Its demise is a case study of the transport industry’s interdependence — impacting on alliance partners, ship lessors, port
Top 10 risks across the transportation sector.
operators, freight forwarders, insurers and cargo owners — stranding more than $14 billion in goods at sea. The single biggest individual threat across all modes of transport is the potential for cyber and data privacy breaches. Dissenters from that view argue that
BC SHIPPING NEWS
Commercial Marine News for Canada’s West Coast.
www.bcshippingnews.com 34 — BC Shipping News — February 2017
cyber-risk fears are fuelled by an alarmist media environment where discussion is dominated by hacking horror stories, illintentioned insiders and suggestions that the critical systems of most top corporations have already been compromised (the owners just don’t know yet). But there is no denying that the skillsets of the digital threat actors are growing, just as the transport industry’s increased reliance on third-parties is multiplying the potential points of entry. Clearly, an increasingly connected world requires a community response to many risks. No company, no matter how vigilant, is an island. The Transportation Risk Index can be downloaded from www.willistowerswatson.com — the results are well worth the read.
SHIPPING A ship owner’s challenge — Part one
The container and bulk shipping trades By Syd Heal
T
he New Year opens on very mixed notes as far as international shipping is concerned. Much has been reported since I last wrote about container liner shipping. It has been a 50-year revolution that has reshaped international shipping so overwhelmingly, moving from 10-15,000ton cargo liners to giant ships of up to 20,000-TEU capacity, that have forced the building of new shipyards, harbours, dredging projects, methods of distribution, rail, road and warehousing services — and just about everything else that has any bearing on the subject. The over-size ships now becoming known as ULCVs (Ultra Large Container Vessels) are still pouring out of the shipyards, while the lay-up berths are crowded with smaller ships up to even 12,000 TEU. The shipbuilding process from initial order, through launch to final completion, commonly spans around three years and, once set in motion, it becomes increasingly expensive to cancel a contract. Delays in delivery have been negotiated between
owners and builders but there is always a penalty to be expected. That’s a common enough expedient, but there always seems to be that element among operators who can’t wait to get their latest big toy into their operating department, with dire consequences for some of their older and smaller sister ships.
The over-size ships now
becoming known as ULCVs (Ultra Large Container Vessels) are still pouring out of the shipyards... How else does one explain the current debacle in liner shipping? Alphaliner counts 357 container ships with a total capacity of about 1.5 million TEU currently in lay-up and unemployed, with many of them awaiting the inevitable final voyage to the scrapyard. To put a finer point on this fact, Drewry identifies 34 ships in the 8-10,000 TEU class, 13 in the 10,000-12,000 TEU and 21
over 12,000 TEU. That’s a total of 68 of the most employable ships from about zero to perhaps six years in age. Can blame be allocated? Yes, I suppose it can, although it probably serves little purpose. But in my view the visible rot started with the acceleration in successive market sizes from about 11,000 TEU ships, the forerunners of ship sizes that rapidly grew to about 20,000 TEU in a remarkably short period of time. Leading the way was always Maersk with large orders for each new size benchmark reached. It seemed that the Copenhagen company, with its additional diversified resources, could always act in its own perceived best interests, unmatched by any of its rivals, most of whom tried to keep up by ordering more giant carriers, and in the process worsening the position of the smaller, earlier classes, as well as weakening corporate finances. In keeping pace with Maersk, the European companies have done better than the non-European companies. Of the five biggest, four are European and one, COSCO, is
Photo: BC Shipping News
Speculation continues to focus on whether more mergers (e.g., Evergreen, Yang Ming and/or Orient Overseas Lines) are still to come. February 2017 — BC Shipping News — 35
SHIPPING
The Star Lima, christened during a ceremony in 2012 at Canada Place, is now part of the G2 Ocean alliance between Gearbulk and Grieg Star.
government-owned by China and is still struggling with red ink after its merger with China Shipping. The Japanese government has always kept a tight rein on its national shipping industry despite private ownership. This somewhat heavy-handed practice goes back to the very beginning of the westernization of the industry in the mid-19th century and has steered the Japanese merchant marine ever since. The decision to merge the container interests of NYK, Mitsui-OSK and Kawasaki ‘K’ Line into a newly merged entity was designed to defensively strengthen the Japanese exposure in this era of excess and re-organization. Some speculation centres on what will happen in Taiwan with its two container lines Evergreen and Yang Ming together with Orient
36 — BC Shipping News — February 2017
Overseas Lines of Hong Kong. Some commentators see another major merger coming together between two if not all three, again perhaps for similar reasons to the Japanese development. Sales to breakers now see ships built well into the first decade of the current century going for scrap with only half a normal ship’s life expended. Figures provided by reliable shipping research firms like Alphaliner and H.P. Drewry are forecasting further mergers as the liner operating companies eventually slim down to about eight by 2025. My personal belief is that re-organization and consolidation will come a lot faster. With the latest merger of Maersk and its takeover of venerable and historic Hamburg Sud-Amerika — the second German container liner company that has maintained its independence since its founding in 1871 as a passenger and cargo carrier from Germany to South America — has all along been its main focus. South America has so far seen little development of services by Maersk so the takeover will correct this deficit from Maersk’s viewpoint. The role of leasing companies has come under some scrutiny as CEOs have protested their confidence in the strength of the covenants of their clients, and yet a few weeks later, they find them teetering on the edge of bankruptcy. It happened in the Hanjin case, but what else could the responsible executive do without prematurely revealing that all was far from sound with the client.
Two leasing companies are in a very tough spot and may be facing bankruptcy. Danaos of Greece has taken hits from both Hyundai and Hanjin on 13 ships, and after several very lean years it may now be in a worse position than ever. The other is Rickmers Maritime of Singapore, previously related to well-known and historic Rickmers of Germany, although ties have now been cut with Bertram Rickmers having bought out the other investors. The Singapore company recently sold a seven-year-old ship to raise money, but unfortunately, all of its ships are liable to end up this way due to premature obsolescence as they are all in the smaller classes that are now so vulnerable to the poor charter markets. News of a rare shipbuilding order has just been released. The Republic of Iran Shipping Company has just ordered four 14,500 TEU ships from South Korea, which demonstrates the mix of ideas that motivate some countries with international aspirations, who also mix religion and politics in with impractical economic ideas. If they looked around they could no doubt pick up good secondhand ships, almost new at a very healthy discount, given the situation reported earlier in this article.
Strengths and weaknesses soon become apparent as some of today’s bulk carrier companies show much stronger survival skills...
The bulk carrier market
Just as cargo liners are the ancestors of container ships, so also are bulk carriers the direct descendants of the tramp ships of the 19th and 20th centuries and earlier trading vessels going back into earliest history. The centuries of tradition that led to the formation of institutions like Lloyds insurance market, the Baltic Exchange, and the development of the Baltic Dry Index somehow characterize the patient nature of otherwise keenly competitive owners who seize their opportunities at the trough as their turn comes up. In short, it is in total contrast to the container liner business, and the situation that many see developing into
an ever tightening monopoly dominated, as it is now, by alliances led almost entirely by strong groups, sometimes, it seems, with an attitude of ‘kill or be killed.’ Strengths and weaknesses soon become apparent as some of today’s bulk carrier companies show much stronger survival skills than their weaker sisters. The greatest masters of survival tactics are the Greek owners who often have powerful family connections, a ‘fairy godfather’ of sorts with strong personal and corporate bank connections and the ability to bail out their favoured company sometimes with dramatic effect. One such recent example was George Economou, CEO and founder of Dry Ships Inc., owner of about 40 bulkers, who seemed destined for bankruptcy. Mr. Economou pulled the rabbit out of the hat and with private funds, bailed his company out to become Dry Ships’ main creditor, and at the same time was gratified to see Dry Ships’ stock jump to around $10 from pennies. A favourite of mine has always been Safe Bulkers Inc., a Marshall Islands company with a fleet of 37 Capesize to Panamax vessels totalling 3.3 million dwt tons and an average age of 6.1 years. CEO and founder is Polys Hadjiannou who quietly purchased a succession of four ships from Safe Bulkers and leased them back to the company for 10 years with clearly set out repurchase terms. The company is here to stay and has never missed a quarterly dividend in the 10 years since it was launched, even when it could only pay a penny a share! SB has invariably been at or near the top in Marine Money’s annual awards for the best-managed shipping companies and has a stable board of directors and key executives of long-standing. In February 2016, the Baltic Dry, in common with many other world markets, reached an all-time low and the entire dry cargo sector was gasping. Today, rates have greatly improved with owners starting to see some solid earnings developing. Safe Bulkers has gone to market to raise additional capital to buy some modern, but distressed tonnage while ship values are low. Corporate policy has always favoured medium to longer-term time charters, but this is only possible when spot rates are high enough to give them support. As a sign of improvement, only one of its 37 ships is currently in
the spot or single-voyage market with the remainder now committed to time charters, albeit with many being quite short, but with three Capesize ships being committed to multi-year contracts which have been a huge help in stabilizing the company’s chartering activities as they were all set up before the recent disastrous down turn that has effected all owners.
...a new trend among dry
cargo companies may now be indicated by recent announcements... It looks very much like 2017 will be a year notable for mergers which, for the container liner companies, will simply be a continuation of 2016. However, a new trend among dry cargo companies may now be indicated by recent announcements involving strongly established Scandinavian companies. These are full mergers where partnerships, or at least compatible working arrangements, existed. The first to be spotted was Wilhelmsen-Wallenius, a NorwegianSwedish partnership with a very large chunk of the international vehiclecarrying business, moving new car and truck deliveries from factories to world markets. Its stock will be traded on the Oslo stock exchange using Wilhelm Wilhelmsen ASA as the merging vehicle which might mean that the Norwegian element will be dominant. The second announcement involves Gearbulk and Grieg Star Bulk Shipping. Both operate similar businesses with fully geared Handymax open-hatch bulkers that usually favour gantries. I don’t think there was ever anything like a formal partnership prior to this announcement. More likely, market conditions pointed to economies of scale achievable through a merger as, after all, they have probably suffered low shipping rates like everyone else. Grieg will be remembered locally as a former joint venture with WestfalLarsen who opened the now busy port of Squamish which is still controlled by Grieg and greatly favoured by Star Bulk ships. Syd Heal, a veteran of the marine industry and a prolific writer and publisher of marine books, can be contacted at richbook@ telus.net. February 2017 — BC Shipping News — 37
HATCHES
Effective hatch-cover testing Christopher Loat President L&L Maritime Corporation
I
n a 2010 Bulk Carrier update, classification society Det Norske Veritas (DNV) noted that “the classification societies’ overall objective is to ensure the safe operation of the ship in all sea and weather conditions. As long as the seaworthiness of the ship is ensured, class pays limited attention to the ‘well‐being’ of water‐sensitive cargo. The ingress of a small amount of seawater into the cargo hold does not usually represent any risk to the safety of the ship, but even small amounts of water may do extensive damage to cargoes that are sensitive to seawater, for example, grain, fertilizer, steel and paper cargoes.” Ensuring a ship’s hatch covers are weather‐tight is an essential aspect of exercising due diligence to make a ship cargo worthy, but is an aspect that may not be covered by routine classification society inspections. This requires an appropriate method of testing to identify and resolve any potential problems or defects.
This briefing compares the principal methods of testing hatch cover weather tightness.
Hose tests
A hose test, carried out in accordance with the guidelines of the International Association of Classification Societies (IACS), has long been a recognized way of testing the apparent weather tightness of hatch covers. As its name suggests, it involves moving along a hatch‐cover joint while directing a powerful jet of water at the joint to determine if any water passes through. Hose tests show whether the physical contact between packing rubber and its mating surface is satisfactory in a static condition as any discontinuity or lack of contact will allow water infiltration. Contact and compression, as described above, are two different things. A hose test will not show if the compression of the packing rubbers are satisfactory.
Ultrasonic tightness testing
An ultrasonic test involves placing a transmitter in the cargo space and measuring an ultrasonic signal received outside the space. It provides an idea of the compression of a sealing system and gives an indication of areas where the sealing system is compromised. To check that the hatch covers are weathertight, a transmitter is placed in the hold and an open hatch value (OHV) is taken. The OHV represents the strength of an ultrasonic signal that reaches the receiver in a direct line and represents a situation where there is no sealing at all. After closing and securing the hatch covers, the surveyor will then pass around the hatch‐cover perimeter and over the cross-joints, checking for ultrasound
Ensuring a ship’s hatch covers are weather-tight is an essential aspect of exercising due diligence to make a ship cargo worthy.
Photo: Dave Roels (www.daveroels.com)
38 — BC Shipping News — February 2017
Classification societies agreed in 2001 that ultrasonic testing ... was acceptable as an alternative method to hose
•
testing for determining the weather tight integrity of hatch covers for class and statutory inspections. passing through the sealing system. If there is a good compression, no or almost no, ultrasound will pass. Whenever there are flaws or discontinuities in the sealing system, ultrasound will pass and be picked up by the receiver. The measurements thus obtained can then be compared with the OHV taken at the outset of the test and by doing so an idea can be obtained about the importance of the leak, which actually represents a certain loss in compression of the sealing system. It is generally accepted that in areas where a reading of more than 10 per cent of the OHV is found, there is lack of compression that requires further investigation and repairs or corrective action. The rationale behind this 10 per cent standard lies in the fact that loss of compression in a sealing system will reduce the compensating capacity of the seal and, as such, there is an increased risk of water infiltration while on passage. Classification societies agreed in 2001 that ultrasonic testing, when carried out with class type‐approved equipment, was acceptable as an alternative method to hose testing for determining the weather tight integrity of hatch covers for class and statutory inspections. IACS developed standards and criteria under IACS UR Z17 for firms engaged in ultrasonic testing. This was necessary to ensure that surveyors checking hatch covers for class and statutory purposes were familiar with basic knowledge of hatch‐cover design, maintenance and repairs. Calibrated and classification society Type‐Approved equipment should always be used so that repeatability of test results is guaranteed. The world’s leading hatch‐cover manufacturers have also recognized the benefits of ultrasonic testing. They provide training programs for their service engineers to allow them to use the equipment in a proper way for checking repairs and carrying out tests as class service suppliers in repair and new‐ building scenarios.
It should also be noted that, with ultrasound, the sealing system is checked for compression, which means that the physical condition of the packing rubbers must be such that they are still able to exert compression. Situations whereby the packing rubber is over‐compressed, or where the compression bar is very thin and knife-edged, and therefore cutting into the rubber rather than compressing it, are two examples where ultrasound may not pass through the sealing system. This would give the false impression that all is in order, whereas actually the sealing situation is unacceptable. This is why it is recommended that an ultrasonic inspection is followed by a visual inspection whenever possible.
Hose versus ultrasonic testing
Whilst hose tests give an idea of the physical contact between a packing rubber and its compression bar/mating surface, ultrasonic tests give an idea of areas where the compression of the sealing system is compromised. As mentioned above, contact and compression are two different things and consequently, the test results of hose tests and ultrasonic tests cannot be compared in practice. Ultrasonic testing allows hatch covers to be tested in a static condition in port, but allows the operator to form an opinion as to whether or not the hatch‐cover sealing system will perform well when the ship is at sea in a dynamic condition. This is a major advantage when compared to the hose test and can be a very important tool when exercising due diligence to determine if a ship is cargo-worthy and if hatch covers are weathertight.
Benefits of ultrasonic testing
The use of ultrasonic testing equipment has other benefits, including: • Ultrasonic testing is a reliable and non‐destructive testing method which gives an indication of the compression status of the sealing system. • Ultrasonic testing allows easy detection with pinpoint accuracy of damaged areas or areas where lack of compression exists. This significantly
•
•
•
reduces the time needed to identify potential leaks. Once the location of the leak is known, the correct repair method can be determined and, as small and local damages can easily be identified, unnecessary extensive repairs can be avoided. Repeated testing can be used to check the effectiveness of the repairs. Ultrasonic testing is a ‘dry’ testing method without the risk of damaging water sensitive cargo or causing pollution of the dock, river or sea water. Ultrasonic testing equipment can be used in loaded or empty holds, which in certain cases allows repairs to covers during loading, and checking of repairs during or after the loading period, but prior to going to sea. Ultrasonic equipment can safely be used under all weather conditions (even with sub‐zero temperatures).
...tests can be carried out regularly to allow the crew to take timely action in case of damage or when lack of compression is identified.
Onboard ultrasonic testing
If ultrasonic equipment is carried on board, tests can be carried out regularly to allow the crew to take timely action in case of damage or when lack of compression is identified. Because of the repeatability of class Type Approved equipment, the compression status can be trended and repairs planned well in advance. Carrying out regular tests will help provide the ship with an inspection, testing, maintenance and repair history which is evidence of the exercise of due diligence. For more information on safety through ultrasound go to: http://www.llmaritime.com/ultrasonictesting-instruments.html. Christopher Loat is President of L&L Maritime Corporation. In co-operation Class Instrumentation Limited, LLMC has been providing ultrasonic instruments for the marine and offshore oil & gas industries for over a decade. To contact Christopher, please email him at: chris. loat@llmaritime.com . February 2017 — BC Shipping News — 39
CARGO LOGISTICS
Data pipelines of the future By Colin Laughlan President, Laughlan Consulting International Inc. Member, Experts’ Forum – UN/CEFACT
K
arl Marx is not often cited as a supply chain management visionary, but “from each according to their ability, to each according to their need” is a perfectly apt description of how the electronic capture and extraction of shipping data will undergo a global revolution in the not too distant future. Innovative data pipelines — developed largely by the European Union (EU) — will soon be complemented with new standards for data interoperability developed by the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT). The seamless international data pipeline of tomorrow holds the promise of greatly enhanced supply chain visibility to benefit end customers, and significantly improved security in the global transportation of containerized goods.
...there are significant discrepancies between the plain language (narrative) description of the shipped goods and the Harmonized System (H.S.) code...
Background
Despite efforts by the World Customs Organization (WCO) over the past decade to balance trade facilitation with security measures based on the analysis of cross-border trade data (see BCSN September 2015: SAFE Framework gives glimpse into Future Trade Management), the system for ensuring data integrity is not working well. According to Randy Rotchin, President and CEO of 3CE Technologies Inc., a Canadian company whose software measures the accuracy of Customs declarations, there are significant discrepancies 40 — BC Shipping News — February 2017
between the plain language (narrative) description of the shipped goods and the Harmonized System (H.S.) code, a multidigit classification of the description used for Customs declarations. “We’ve done many studies for many countries. The error rates range from about 25 per cent to somewhere around 40 per cent,” Rotchin told BCSN. “Aside from manual and very laborious processes, there’s no real way to ensure that these codes that are being declared are very accurate,” said Rotchin. 3CE’s studies were part of the research that alerted David Hesketh, who at the time was Director of Research and Development with HM Revenue and Customs in the United Kingdom. Other experts pointed Hesketh to studies showing discrepancies as high as 60 per cent. For Hesketh, it was an urgent call to action. For more than 10 years he has spearheaded research within industry and government to find a workable supply chain solution. (Hesketh even completed a Masters degree on the subject during his research and is now a lecturer at the Centre for Customs and Excise Studies in Australia.) The problem, he explained, was that “it’s very hard for Customs to do anything about it unless they launched some big enforcement campaign, which may very well end up flying in the face of trade facilitation. “Customs was inheriting the consequence of bad data which had its roots in the commercial supply chain. The focus had developed historically based on information provided to terminals because operators had only been interested in how many containers were arriving — with the main aim of getting the container out of the gate as quickly as possible.” Hesketh further went on to say: “I believed what was more important was the commodity moved, and who packed the container — that is, where should we
David Hesketh, former Director of Research and Development, HM Revenue and Customs, U.K.
get that data — as opposed to carrying on the old traditional way of import declarations, manifests, and so on. Another major problem was that buyers didn’t really know what they were getting until it arrived. “We need to get the data from the right source, at the right time, and we need to hold that person accountable. I wanted to move that point of capture as far upstream as possible, which ultimately meant the person who was loading the container.” That meant source data would have to come from shippers or their freight forwarding agents, or even in some cases from the manufacturer of the goods. Recognizing that resistance would likely come from shippers who did not want to reveal their competitive sources, Hesketh advised them, “the only people who can access the data are those authorized to have it.” The idea, he said “was not to ask people to give us information that they weren’t really required to by law,
but we wanted it earlier and from better sources.” After several years of uphill battles with traditional mindsets, Hesketh’s efforts have been rewarded and now form part of the massive CORE (Consistently Optimized Resilient Secure) supply chain project currently underway in the European Union. Launched in 2014 as the synthesis of several previous research projects, CORE is a consortium of some 70 companies within the EU and beyond. The overall project looks at many different aspects of logistics — for example, disaster recovery from earthquakes and tsunamis, or terrorist attacks. The data pipeline is another aspect of CORE to create resiliency by getting all the information at source and helping to speed up passage of information across borders. From CORE has emerged a model employing four points of data extraction (waypoints) throughout the end-to-end movement of goods in international supply chains. This data helps border agencies with pre-departure and pre-arrival risk assessment but can also be used for declaration purposes.
Four waypoints
Waypoint 1: When the doors are closed on the container before it’s moved. About 50 per cent of regulatory data can be extracted now. Data is made available immediately to export and import agencies in the pipeline by the shipper. Data at this point also helps buyers minimize risk and provides assurance they are getting the goods they ordered. Waypoint 2: 48 hours after sailing. Even if a container is on the docks 24 hours prior to sailing it doesn’t mean it will get loaded. At 48 hours after sailing (wheels up for air cargo) the majority of Master Bills of Lading are finalized. Additional information such as the ship’s name and its unique identifier, sailing confirmation, and that the container is on the ship is extracted by the export and import authorities. Waypoint 3: 24 hours before port of arrival. This data includes the actual journey of the container, what countries it stopped in, and whether it’s arriving on the dates identified at the beginning. This is the point when a frontier declaration is made under simplified procedures. Data from waypoints 1, 2, and 3 can be brought together for a comprehensive frontier declaration to facilitate
Above diagram shows a seamless, integrated data pipeline concept.
immediate release, or, in the future, release prior to arrival for authorized operators using the pipeline approach. Waypoint 4: When the container doors are opened, goods are taken out and validated against the purchase order. The receiver can see if it’s what was ordered. Any remaining information is extracted for the import supplementary declaration.
Using the pipeline ... showed a “30 per cent savings with supply chain efficiencies alone...”
Commercial pipeline in the U.K.
One successful commercial pipeline currently operating in the U.K. is the Ingot Portal developed in 2012 as a voluntary part of the CORE project by Warrant Group Ltd., the U.K.’s largest privately owned logistics services company. David Roff, Warrant’s Director of Information Technology, explained how several challenges were met, admitting the biggest was the change management needed to obtain information at Waypoint 1. “The shipper naturally says ‘no’ straight away, so it’s got to be customer-driven,” said Roff. “The customer then says, ‘as part of the contract, we need the following information supplied in
every stage. The information is required to do business with us. It enhances our supply chain and it reduces bottlenecks and costs,’ so that is how it’s incentivized, and overall the customer wins.” However, Roff pointed out that it’s a win-win situation once data begins flowing. Using the pipeline, one of Warrant’s clients, Kirkby Tyres, showed a “30 per cent savings with supply chain efficiencies alone,” said Roff, “not to mention additional savings with greatly reduced demurrage and detention costs.” Roff also explained how technology has allowed competitors to work collaboratively. Another of Warrant’s clients, B&M, a large variety retailer in the U.K., wanted the visibility afforded by the pipeline, but also wanted to keep several smaller-sized freight forwarders that separately managed the retailer’s goods movements. “When I went around to speak to the freight forwarders, I was very clear,” said Roff who told them, “This isn’t about who’s going to get a portion of the freight. I’m only here as an independent software provider for B&M and it’s in your interests that we all work together because we keep the wolves from the door” — an additional benefit for the smaller companies, Roff noted, “because in the traditional world, the kind of visibility desired by B&M would only be possible from a large global freight forwarder — but you would have to book all February 2017 — BC Shipping News — 41
CARGO LOGISTICS your freight with them. We keep global freight forwarders out of the equation,” he said. “It enables small and mediumsized companies to access a data pipeline that would probably be out of the scope for most of them.” Warrant’s collaborative solution, he explained, was to use technology that “stuck a layer above all of that [competition],” so competitors could maintain confidential information but still have commercial opportunities. “Now everybody feeds their data into the Ingot Portal. Without the technology and thought process of how can we work together collaboratively, rather than against each other, it could not have worked,” he said.
Future developments
The next phase of Hesketh’s supply chain data revolution appears to be headed to UN/CEFACT to integrate standards for global interoperability developed by technology experts from around the world. “The CORE data pipeline project is being used as a base for a project that Warrant Group’s David
42 — BC Shipping News — February 2017
Roff will lead to create the first data pipeline standard from UN/CEFACT,” Dr. Lance Thompson, Chair of UN/ CEFACT, confirmed at the time of this writing.
A globally seamless data
pipeline would enable data exchanges by governments and businesses with whatever system they currently use. A globally seamless data pipeline would enable data exchanges by governments and businesses with whatever system they currently use. It would also enable data to be swapped between proprietary pipelines, thus enhancing competition as clients would not be locked into any single pipeline. Thompson also speculated that three categories of data pipelines could eventually come out of UN/CEFACT’s work, which he described as i) a logistics
pipeline; ii) a commercial pipeline; and iii) a regulatory pipeline. “We don’t have anything official at this time, but it does seem clear that we’re going to be making at least one other type of pipeline — in order to separate logistics from supply chain information,” he said. “The regulatory pipeline,” he added, “would largely be based on data models which will take information from the other two pipelines and put it into a format that would be comprehensible to governments — mapping towards the WCO data model.” He expressed his optimism that the potential standard would be proposed at UN/ CEFACT’s Forum in Geneva at the end of March 2017. “When the projects are completed,” Thompson said, “UN/CEFACT will have a standard that any company afterward can use freely to establish a data pipeline.” Colin Laughlan is a member of the Experts’ Forum at the United Nations Centre for Trade Facilitation and Electronic Business. He can be reached at colin@laughlanconsulting.com.
LEGAL AFFAIRS
Protection of Canada’s Arctic Waters By Peter Swanson Partner, Bernard LLP, Vancouver
C
Fishing Zones Act. Additionally, Canada took steps to ensure that these legislative changes could not be challenged internationally through the International Court of Justice by adding a reservation to Canada’s acceptance of the Court’s jurisdiction.
Canada’s reaction to the transit of the S.S.
S.S.Manhattan with the ice breaker CCGS John A. MacDonald (Courtesy: D.Kavanagh)
Manhattan was swift by Parliamentary standards and was substantial. Source: http://sunshiporg.homestead.com/manhattan.html
anada has a long and robust history of seeking to protect Canada’s Arctic waters. The transit of the U.S. tanker S.S. Manhattan in the late summer of 1969 through the Northwest Passage was viewed by the government at the time as a challenge to Canadian sovereignty and brought into sharp focus the risks associated with tanker and related traffic in northern waters. According to Larry Gedney and Merritt Helfferich in “Voyage of the Manhattan” (Alaska Science Forum, December 19, 1983) the transit was challenging for a large tanker requiring assistance from both Canadian and U.S. escorts. They wrote: The Manhattan, heavily reinforced for this voyage, was as long as the Empire State building laid on its side, and displaced about twice the amount of water as the Queen Elizabeth. She was equipped with the latest nautical navigation aids, relying largely on satellite fixes which could place her location to within a third of the ship’s length. These instruments did not always work, however, and at times it was necessary for the crew to measure the ship’s speed by throwing blocks overboard and timing their passage by stopwatch. Setting sail from Chester, Pennsylvania on August 24, 1969, she managed to plow her way north to Point Barrow by September 14, and returned to New York by November 12. But there were problems. Although the Manhattan broke ice up to 14 feet thick for extended periods and smashed ice ridges up to 40 feet, she often got stuck in hard polar ice. Apparently underpowered in reverse, she had only one-fourth as much power to go astern as to go forward. At one point on the night of September 10-11, the Manhattan was attempting to become the first vessel to make an east-to-west passage of McClure Strait when she became locked. She escaped only when steam was
S.S.Manhattan in the North West Passage (Courtesy: D.Kavanagh)
diverted from heating the living spaces to squeeze an additional 7,000 horsepower from her 43,000 horsepower turbines. Even then, it was only with the assistance of her constant companion, the Canadian icebreaker, “John A. McDonald,” that she was able to escape. The U.S. Coast Guard ship “Staten Island” also assisted in the effort. Canada’s reaction to the transit of the S.S. Manhattan was swift by Parliamentary standards and was substantial. In 1970, Parliament enacted the Arctic Waters Pollution Prevention Act (AWPPA) and extended Canada’s territorial sea from three miles to 12 miles by amending the Territorial Sea and
The AWPPA was a novel approach at the time and was a break with Canada’s general practice and tradition of acting in a manner consistent with international norms. Some would say the AWPPA put Canada at the forefront of protecting the unique northern environment. Others considered the AWPPA as an unacceptable attempt by Canada to limit freedom of navigation through the assertion of jurisdiction to “…waters adjacent to the mainland and islands of the Canadian arctic within the areas enclosed by the sixtieth parallel of north latitude, the one hundred and forty-first meridian of longitude and a line measured seaward from the nearest Canadian land a distance of one hundred nautical miles…” The AWPPA had a number of novel features at the time. It provided for the creation of “shipping safety control zones” within which specific requirements were imposed. It imposed fines of up to $100,000 for the wrongful deposit of “waste” broadly defined to mean “ …any substance that, if added to any waters would degrade or alter or form part of a process of degradation or alteration of the quality of those waters to an extent that is detrimental to their use by man or by an animal, fish or plant that is useful to man…” It created February 2017 — BC Shipping News — 43
LEGAL AFFAIRS requirements for the provision of proof of financial responsibility in the form of insurance or an indemnity bond satisfactory to the Governor in Council now somewhat common. It created joint and several liability for the owner of a ship and the owners of cargo which remains fairly unique today. It empowered the Governor in Council to create regulation standards relating to the construction of vessels, fuel tanks, machinery, navigation aids, propulsion, the manning of vessels and the types of cargo that can be carried, including maximum quantities, and requirements for pilots and ice navigators as well as other unique provisions. Of course, times have changed. There is now a renewed interest in exploration and shipping in the Arctic by reason of global warming. That interest is paralleled, to a degree, by the recognition that our polar regions are unique and require different and specific protective measures. As such we now have the creation and introduction of the International Code for Ships Operating in Polar Waters (the Polar Code) which came into force, internationally, on January 1, 2017. The Polar Code was implemented internationally by amendments to the International Convention for the Safety of Life at Sea (SOLAS) and the International Convention for the Prevention of Pollution from Ships (MARPOL). The rationale for the Polar Code includes the recognition that ships operating in the polar regions (both north and south) are exposed to unique risks, including extreme weather challenges, lack of good navigational charts, communications systems and other navigational aids, to name a few issues. It is further recognized that responding to ship source pollution, whether bunkers, cargo or wrecks, has unique challenges in the polar regions. Indeed, it is further recognized that those challenges can vary substantially from north to south in that the “…Arctic is an ocean surrounded by continents while the Antarctic is a continent surrounded by an ocean.” As a result, the Polar Code seeks to impose mandatory standards covering items such as ship design, construction and equipment as well as operational requirements, including training and environmental issues. The Polar Code, according to the IMO, is designed to: 44 — BC Shipping News — February 2017
… make operating in these waters safer, helping to protect the lives of crews and passengers. It will also provide a strong regime to minimise the impact of shipping operations on the pristine polar regions. It will be seen as a major achievement in IMO’s work to promote safe and sustainable shipping in all regions of the world, including the most challenging and difficult. (IMO Briefing: 02 01/01/2017) While the Polar Code is viewed by many as a positive step forward in promoting safe shipping in the polar regions, many consider it to fail, or fall short, on many fronts. The World Wildlife Fund (WWF), as an example, while viewing the Polar Code as a first good step, is critical as it is said not to ban heavy fuel oil in the Arctic (already banned in the Antarctic); does not address the discharge of grey water in the Arctic; lacked consultation with coastal Arctic communities; and did not take into account in any meaningful way traditional knowledge of marine mammal habitats in the North. No matter how the Polar Code is viewed, Canada will continue to assert sovereignty, and hence legislative control, over those Arctic waters considered part of Canada. The AWPPA and regulations, as amended, remain the law of Canada and will continue to be enforced in relation to ships transiting Canada’s northern waters. While the Polar Code helps to supplement and provide an international framework for the regulation of shipping, manning and pollution prevention in those Polar regions, it will not, in Canadian waters at least, replace the provisions and requirements of the AWPPA and regulations which prevail. Nevertheless, it is expected that regulatory changes will be
made by Transport Canada to harmonize, where appropriate, the Canadian legal regime with the Polar Code. Peter Swanson is a partner in the maritime law firm Bernard LLP in Vancouver and can be reached at swanson@bernardllp.ca.
Located at Vancouver Waterfront and Roberts Bank
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Dave aboard the CSL Tecumseh “Action Photography - everywhere!”
Marine Fire and Safety Training and Consulting Marina Firefighting Confined Spaces Entry Emergency Response Review “Dave’s not just a photographer, he’s an artist.” Jane McIvor, Publisher BC Shipping News
SeaFire Training John F. Lewis, FNI CRSP Cel: 604 951 0061 Tel: 250 325 1857 Email: seafire@shaw.ca February 2017 — BC Shipping News — 45
SAFETY TRAINING
Chinese fire drill By John Lewis, FNI, CRSP Seafire Training
“
You were referred to me as an instructor,” said the voice on the phone. “Oh, by whom?” I asked (5th Rule of instructing — always seek feedback). He told me; asked if I could teach Dangerous Goods (yes, I could) and Basic Safety (of course) and I asked “who and where?” (1st Rule — know your learners). “It’s a maintenance company,” he said. “That’s OK.” “Aircraft maintenance,” he continued. I swallowed, but reasoned that Dangerous Goods on ships and trucks couldn’t be much different from aircraft. He brushed aside any misgivings and got to details. “Two four-day classes in Guangzhou.” While he rambled on about IATA approved courses, my mind quickly sought the file labelled ‘Geography.’ “But that’s in…”
“China. Right. We’ll need your passport for a visa, and…” Away he went, into details while I pondered over electrical connections and other trivia. (2nd Rule — set the scene for learning). “Do they speak English?” (1st Rule, again). “Of course, they’re in aviation.” Anyway, three weeks later, after a week of intense preparation, I landed in Guangzhou Airport by way of Hong Kong. I felt little prepared beyond a liking for Chinese food, the ability to use chopsticks and how to say ‘hello’ and ‘thank you’ in both Mandarin and Cantonese. A visit to BCAA gave me an assortment of plug adaptors to fit my laptop — what if I could not use the PowerPoint presentation I’d slaved over? My first reaction, predictably, was — I’ve never seen so many people. Guangzhou is a small (six million
maritime and commercial law on canada’s west coast W. Gary Wharton Catherine A. Hofmann
Peter Swanson David S. Jarrett
Thomas S. Hawkins Tom Beasley
David K. Jones Connie Risi
Russell Robertson Mark Gill
Michael M. Soltynski
Megan Nicholls
Roger Tangry
associate counsel: Lorna Pawluk tel: 604 . 6 8 1 . 1 7 0 0 fax: 604.681.1788 emergency response: 6 0 4 . 6 8 1. 17 0 0 address: 1500–570 Granville Street, Vancouver, BC, Canada, V6C 3P1 web: www.bernardllp.ca
46 — BC Shipping News — February 2017
people) city on the Pearl River and 16 hours ahead of B.C. It’s clean, crowded and has buildings ranging from brick tenements in the back streets to palatial hotels. I’d expected millions of cyclists wearing Mao Tse Tung suits — but I was 20 years too late for that. Most of the traffic is still cyclists, buses, taxis and trucks, but a growing number of cars are on the roads. If you visit, beware: not all traffic stops for pedestrians, even on crosswalks. Best to stand still as the rush hour flows around you, like water. The average family transport is a motorcycle — Dad driving, Mom behind and baby in the middle. The ‘one child per family’ rule that seems tragic in the individual case, appears to work for China. At least, unlike India, they have controlled population growth and all those I saw were clean and healthy looking. At the weekend, I wandered the parks and shopping malls. Often, I was the only white face around, but I was always greeted with a smile. The hotel had an interesting feature. On entering, the guest inserts the room cardkey into a slot. This enables power to the room and ensures that, on leaving, all is switched off as removing the cardkey isolates the room. Another feature is more ancient. There is a woman on each floor and guests’ movements are noted, especially if visitors are brought in. I had no visitors, but learned it’s for protection as much as control. Food: ooh, the food. I’ve always liked Chinese food, but that’s like saying you like European food. I savoured Szechuan, Shanghai, Cantonese and more. Marvellous meals could be had for $2-5 at roadside restaurants, or you could spend $40 dollars for a hotel dinner. I tried them all, aided by Jack, an expatriate American married to a local woman. It’s amazing how many Americans live and work in China. One manager I met and assumed to be Chinese was born and
raised in Frisco — he’d only been in China for eight months. He introduced me to the joy of foot massage during the one and a half hour lunch breaks. Ah, for $10, to have one’s shoulders and feet rubbed and pummeled while sipping tea. Afterwards, it was like donning a new pair of runners — floating. But I was there to work and work I did. My students did speak English to varying degrees. I distributed the agenda and away we went. (4th Rule — state your objectives). We had fun, as gradually we learned about each other and I gained an understanding of how things worked, for example, the long lunch hour. I knew the ‘ladies of the office’ brought in boxed lunches each day. I didn’t know that when I went to get photocopies at lunchtime, the main office door would be closed. “The ladies are sleeping.” How civilized — and they’ve probably never read Robert Fulghum’s “All I ever needed to know I learned in kindergarten.” Mind you, the sleeping could go too far. A few of my students liked to get the head down on the desk for a while each afternoon. I’d return from lunch or foot massage, eager to go and enter a darkened room. Mutterings that seemed like ‘it’s just that big-nosed gwailo — go back to sleep.’
I learned again how universal a smile is; that humour makes everything easy and that the ability to laugh at one’s self translates very well. I learned again how universal a smile is; that humour makes everything easy and that the ability to laugh at one’s self translates very well. Initially, my students were a little in awe of ‘the teacher,’ but we overcame that and the results spoke for the work they did. All ended well and I filed the experience under ‘been there, done that,’ but a few months later The Voice was back. ‘Could I design a basic fire fighting, spill response and chemical handing course?’ Of course I could. This time, I went by way of Beijing. I had roughly the same students as before but this time the exercises were practical rather than paper, hence the title of this piece. Once again, I found how alike we all are. At one point I lit a small gasoline fire in a narrow alley. While I waited, out of sight, with a backup extinguisher, I observed all the characteristics a fire instructor learns. We had the overly brave; the overly cautious; the ‘I’m sure it’s out’ character who turned his back on the fire — (it wasn’t out). One student approached bravely, but pulled his coat over his head and ran when he saw the flames. However, an older man then dealt with the fire, very effectively. Yes, we were beginning to build a team. I noticed that, as in Canada, the women in the class seemed to be ‘twice as good to be half as accepted.’ By the end of each three-day class we were tired and grubby but safety had become more relevant to their daily work. “Mister John? We enjoyed very much.” Whew. I’d feared they didn’t like ‘discovery learning.’ (That’s instructor jargon for ‘I’m not sure what happens next.”). If in doubt, stick to the lesson plan (3rd Rule). For me, the second trip was more enjoyable, marred only by a heavy head cold. I had six days to instruct while feeling like my head was swathed in cotton wool. I’m sure I bought up all
the Chinese cough medicine available. That’s when I discovered Amoxycillin is sold over the counter — hallelujah, I could breathe again. Beijing was even more interesting. My contact there was born and raised in Surrey, B.C. I had a few days touring the airport — best of Austrian made apparatus, but very poor turnouts (protective clothing). I also had time to visit the wellknown Tiannamen Square and tour the Forbidden City, where the movie ‘The Last Emperor’ was made. Fascinating. One historical note on fire protection: to protect the wooden buildings, gold-coated bronze vats, filled with water, are located at intervals. In winter, fires were lit to stop the water freezing. Each vat is about half the size of a compact car and bucket brigades fought any fires. A last lunch — of Peking Duck, of course — goodbyes all round, and off to the airport. “What, you want to see my passport? Again?” Be prepared to be checked every 10 metres or so, and watch for excess baggage charges. I argued when my baggage was weighed. “But I brought more in than I have now.” Just pay up, keep moving: at least tipping is not required — but that may change. Boarding for the 12-hour flight home, I was pleased to be upgraded to business class. Yes, mother, this is the way I’d prefer to travel. At last, the plane banked to the left, I saw the Coast Mountains below and was back in B.C. — just in time for lunch. Thus ended one of my more interesting assignments. Remember the Rules. They work. • Know your learners. • Set the scene for learning. • Prepare a lesson plan, and stick to it. • State your objectives, then teach the class. • Seek feedback, and act on it. Happy instructing: there’s always more to learn. Remember, keep smiling. John Lewis is a safety and risk management consultant. He has taught marine firefighting for land-based firefighters to many departments in Canada, Ireland and the U.S. and is a Master Mariner with a chemical tanker background.
February 2017 — BC Shipping News — 47
FERRIES
Zero-emission, high-speed commuter ferry has a promising future
S
andia National Laboratories, in collaboration with naval architect Elliott Bay Design Group and the Red and White Fleet, has proven the feasibility of building and operating a high-speed ferry powered entirely by hydrogen fuel cells. The 150-passenger commuter ferry, which would emit zero emissions from operations, is designed for a top speed of 35 knots and to service commuters in the San Francisco Bay Area. The study was funded by the U. S. Department of Transportation’s Maritime Administration and included contributions from the American Bureau of Shipping (ABS), the U.S. Coast Guard (USCG), the Port of San Francisco and dozens of other contributors. The goal was to design a workhorse passenger ferry with sufficient propulsive power to compete with Bay Area commuting options, while simultaneously producing zero greenhouse gas and criteria pollutant emissions on the water. Named ‘SF-Breeze’ — an acronym for San Francisco Bay Renewable Energy Electric Vessel with Zero Emissions — the study examined the ship’s feasibility from three perspectives: technical,
regulatory and economic. The project team found no major barriers to construction or operation, either for the vessel itself or the associated hydrogen fueling operations.
“Not long ago, the
prospect of pollution-free transportation seemed like science fiction...” “Not long ago, the prospect of pollutionfree transportation seemed like science fiction,” said Maritime Administration Administrator Paul “Chip” Jaenichen when the study was made public. “Today, through public-private collaboration on projects like SF-Breeze, we are making progress to turn it into a reality.” An SF-Breeze-style ferry would not be the first hydrogen fuel cell-powered ship in service; low-speed (typically five to eight knots) touring boats using hydrogen have been used on a few canals and lakes in Europe. However none are designed to have the propulsive power to compete for commuter traffic. The SF-Breeze is designed to complete four 50-mile round-trips each day at a
top speed of 35 knots for about 60 per cent of the transit time. Refueling could be undertaken around midday, between the morning and afternoon peak commuter periods, and at night. It is powered by proton exchange membrane (PEM) fuel cells, which were selected from among several options for the power plant due to their low weight and volume, commercial availability, proven track record, zero emission characteristic and power performance. The study was based on the Hydrogenics HyPM HD30 PEM fuel cell module, while liquid hydrogen (LH2) was chosen as the fuel in order to minimize the weight and volume of fuel storage. Selection of the power-plant components allowed the Elliot Bay Design Group to undertake a hull-comparison study, which ultimately favoured a catamaran-style configuration rather than a mono-hull or trimaran. This selection was predominantly influenced by speed requirements rather than the power plant, but the catamaran hull’s greater stability also allowed designers to place the LH2 fuel tank on the top deck of the vessel.
The SF-Breeze — designed to complete four 50-mile round trips each day...with zero emissions. 48 — BC Shipping News — February 2017
The SF-Breeze’s final specifications include: • Passenger capacity: 150 (maximum allowable under Subchapter T regulations) • Top speed: 35 knots • Total installed power: 4.92 MW (4.4 MW for propulsion at top speed, 120 kW for auxiliary power, and the remainder for margin) consisting of (41) 120 kW PEM fuel cell racks, each rack containing four 30 kW PEM fuel cell stacks • Fuel: 1,200 kg (~4,500 gallons) of LH2 contained in a single Type C (pressurized vessel) cryogenic storage tank on the top deck, enough for two 50 nm round trips before refueling, with 200-400 kg margins • Electrical architecture: DC power from the fuel cells converted to AC power for the motors. Either one or two motors per shaft. • Propulsors: Waterjet or Voith linear jet • Amenities: Standard passenger cabin with restroom and snack bar • Zero greenhouse gas and criteria pollutants during operation The hull and decks are made of aluminum, which offers weight savings and also is compatible with the use of cryogenic fuel. There remains the potential to examine the use of lightweight composite for further weight savings, but that has the potential to increase construction and repair costs.
...the need for speed drove the design to a slightly longer catamaran than comparative vessels...
As with most prototypes, there were design challenges to overcome. For example, hydrogen fuel cells are heavier than diesel engines for a given power output, so achieving the required powerto-weight ratio for the vessel was not straightforward. Also, the need for speed drove the design to a slightly longer catamaran than comparative vessels deploying more traditional propulsion units. To achieve the necessary safety standoffs from the fuel cells, the designers placed the fuel cells on the main deck of the vessel in a separate compartment, providing the required physical separation between the cells and the passengers.
ABS provided input and review verifying that the conceptual design as presented was compliant with the intent of the applicable rules and regulations, and the identification of any gaps. LH2 and LNG are fuels with very similar physical and combustion properties, although there are some differences. For example, at the boiling point of 20K, LH2 can condense the components of air (N2 and O2), whereas LNG cannot condense air at its boiling point of 111K. Nevertheless, the two fuels have enough in common to use the IGF Code, the IMO’s international safety regulations for ships using gasses or other low-flashpoint fuels, as the regulatory starting point. That knowledge supported the regulatory review in accordance with the USCG’s 46 CFR Subchapter T – Small Passenger Vessels, which applies to vessels with 150 passengers or less, and less than 100-ton gross weight. The IGF Code would form the basis for the hydrogen and fuel cell aspects that are not included in the Subchapter T regulation. ABS Rules for High Speed Craft were also adopted, along with a dozen other regulations, standards and guidance documents to fill in the gaps in the existing marine regulations. “The SF-Breeze feasibility study has advanced the available research on the unique challenges of designing a highspeed passenger ferry powered solely by hydrogen fuel cells,” said ABS Chief Technology Officer Howard Fireman. “The collaboration with Sandia and others in the project team has extended our knowledge base and the potential for technology transfers to address the challenge of reducing the industry’s environmental footprint.” ABS issued a conditional Approval in Principal to verify that the design would be compliant with the intent of the applicable regulations and rules. Combining this assessment from ABS with feedback from the USCG, Sandia, who worked as the project lead and independent technical evaluator, found no regulatory showstoppers and concluded that the vessel would be acceptable from a regulatory perspective once a more detailed ‘ready-to-build’ design was generated in Phase II of the project. Furthermore, the project found no technical or regulatory issues with the hydrogen fueling operations that would be needed to support its operations.
Phases III and IV include plans to build and operate the ferry and station, while Phase V includes extending the hydrogen refueling operations to fuel cell light duty vehicles which are now commercially available and eventually fuel cell buses and trucks.
Despite the initial premium ... one of its prominent selling points would be its game-changing ability to completely eliminate emissions... At today’s economics, the cost of building the first ship from the SF-Breeze study would be more than double (two to 3.5 times) that of comparable diesel ferries. The operating and maintenance costs would likely exceed that multiple. A significant proportion of the build cost is associated with the PEM fuel-cell system, the cost for which is expected to come down as the PEM technology is adopted in other sectors, such as light-duty vehicles. Also, the fuel cell technology itself is expected to advance, potentially reducing unit weights. Despite the initial premium for the SF-Breeze, one of its prominent selling points would be its game-changing ability to completely eliminate emissions from the vessel, particularly as the IMO recognizes that engine efficiency gains and changes in carbon-fuel mixes alone are unlikely to reverse present emissions growth projections. The project team looked at several ways in which the cost premium could be reduced; and those are likely to be revisited in the next phases of the study. But they also examined the assumption of the need for cost parity in the context of the fuel cell electric vehicles currently entering the automotive market. In that market, despite similar cost premiums between ‘zero emission’ and conventional fuelled versions of the vehicles, not only have vehicle manufacturers determined that they have the commercial viability to launch a product, they have also sold existing vehicle stock and have long waiting lists of customers. “Commercially,” the study’s authors concluded, “the SF-Breeze has a promising future and may be viable today.” February 2017 — BC Shipping News — 49
FERRIES
First of three Salish-class BC Ferries’ vessels arrives on the West Coast
S
alish Orca, the first of three new Salish-class vessels built for BC Ferries, arrived in British Columbia on January 11. The vessel reached B.C. waters after a 50-day 10,440 nautical mile journey. After departing from Gdansk, Poland, on November 22, 2106, and stopping for fuel in the Canary Islands, Panama and Mexico, it is being met with much excitement here in B.C. After Salish Orca clears Canadian Customs and final inspections are complete, the vessel will be officially handed over to BC Ferries. Over the next couple of months, crews will be trained and familiarized in the operation of this new state-of-the-art ship. After public open houses in Powell River and Comox, Salish Orca will start service on that route in the spring of 2017. “This is a very exciting day for all of us at BC Ferries as we proudly welcome this beautiful ship, Salish Orca, home to British Columba and into our fleet,” said Mike Corrigan, BC Ferries’ President and CEO. “The Salish-class vessels will provide us cost savings and efficiencies
50 — BC Shipping News — February 2017
The Salish-class vessels were named to honour the Coast Salish people as the original mariners of the Salish Sea. with standardized vessels and greater interoperability as well as enhance safety well into the future. They are very wellbuilt ships, which will serve our customers for many years to come.” The Salish-class vessels are BC Ferries’ first natural gas-fuelled vessels. Using natural gas as the primary fuel source is expected to reduce greenhouse gas emissions by approximately 15 to 25 per cent, reduce sulphur oxides (SOx) by over 85 per cent, reduce nitrogen oxides (NOx) by over 50 per cent, and nearly eliminate particulate matter. The 107-metre Salish-class ships will carry 145 vehicles and up to 600 passengers and crew. The vessels feature two car decks, a passenger lounge, Coastal
Café and Passages Gift Shop. They have a service speed of 15.5 knots. Each ship is powered by three Wartsila 8L20DF engines. Gross tonnage of each ship is 8,728 tonnes. Being built to the highest safety standards, the Salish-class vessels are certified by Lloyd’s Register and Transport Canada. The ships are equipped with two marine evacuation systems with life rafts, two rescue boats, smoke and natural gas detection alarms and state-ofthe-art fire suppression systems. They are propelled by Schottel thrusters at each end, driven by an efficient gas-electric power plant. The Salish-class vessels were named to honour the Coast Salish people as the original mariners of the Salish Sea. Each vessel features the artwork of a Coast Salish artist. The artwork on Salish Orca was created by Darlene Gait, a Coast Salish artist from Esquimalt Nation. Salish Orca’s sister ships, Salish Eagle and Salish Raven, are expected to arrive in B.C. this spring and will start service in the Southern Gulf Islands later this year.
TECHNOLOGY
Transport Canada approves ACO Marine sewage treatment units for use on Great Lakes
A
CO Marine has received typeapproval from Transport Canada for its advanced Maripur NF and Clarimar MF wastewater management systems. “We are delighted to have received approval,” said Mark Beavis, Managing Director, ACO Marine. “Certification delivers added assurance to Canadian ship owners that our technology is completely compliant with Canada’s stringent sewage discharge requirements for vessels operating in the Great Lakes.” He added: “Transport Canada certification, issued in December, underpins our strategic decision to grow our Canadian customer base, following the recent appointment of Ontario-based Marine and Offshore (MAO) as our new distributor for the region. MAO has always had a very concise and professional approach to meeting Transport Canada requirements and now ACO Marine’s suite of environmentally safe and costeffective solutions can benefit vessels with operations in this ecologically sensitive marine environment.” While Canada has not acceded to MARPOL Annex IV, it has adopted its own more stringent rules in Division 4 of its Regulation for the Prevention of Pollution from Ships and for Dangerous Chemicals. With some exceptions, the rules ban the discharge of untreated sewage within three nautical miles of land from ships less than 400t and 12 nautical miles from those larger than 400t. Treated sewage is only allowed to be discharged into Canadian waters subject to specified limits of faecal coliforms per 100 ml of water. Both Clarimar MF and Maripur NF units exceed the discharge standards set out in MEPC 227(64), with the Maripur NF additionally meeting the Section 4.2 clause requiring vessels with more than 12 passengers operating in designated “special areas” to reduce the phosphorous and nitrogen content of treated effluent. Type-approval testing has verified that the systems can reduce Coliform Bacteria to 17.5 count/100ml [standard is 100 count/100ml], TSS to 2.4mg/l [standard is 35mg/l], BOD to 7.3mg/l [standard is 25mg/l], and COD to 60mg/l [standard is 125mg/l], while nitrogen and phosphorous content is significantly below the mandated levels of 20mg/l and 1mg/l at 7.2mg/l and 0.3mg/l respectively.
The ACO Marine advanced Maripur NF wastewater management system.
February 2017 — BC Shipping News — 51
MARINE INDUSTRY
Local maritime industry pitches in to give Hanjin crew a Merry Christmas
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t’s gestures like this that prove B.C.’s maritime industry is all heart! A number of organizations — Tymac, ILWU Local 400, International Transport Workers Federation (ITF), Royal Canadian Marine Search and Rescue, BC Ferry & Marine Workers Union and Filipino community spent the better part of two weeks gathering up donations for the crew of the Hanjin Scarlet and, on December 20, visited the vessel that continues to be anchored off Saturna Island while Hanjin’s bankruptcy gets sorted out. Jason Woods from the ILWU Local 400, Kevin Lee from the BC Marine & Ferry Workers Union, Peter Lahay with the International Transport Workers Federation, Steve Hnatko, Tymac Launch, as well as representatives from the Victoria Filipino Association, the Royal Canadian Marine Search and Rescue and the Mission to Seafarers, joined together to ensure crew had food, warm clothing, books, games and videos among other things to get them through Christmas. Steve Hnatko, Director of Marketing & Communications for Tymac Launch, told BC Shipping News that, in addition to food like ham, turkey, a roasting pig, rice, noodles, water, fresh fruit and vegetables, the Victoria Filipino Association “stayed up until 2:00 am the night before” preparing homemade desserts and special Filipino foods for the 16-member, mostly
Filipino crew. Other donations included a Christmas Tree, lights and decorations, home-made stockings full of essentials (shaving razors etc), hand-made drawings from the children of volunteers, phone cards, warm clothing, entertainment (current DVDs and a PS4 with games!), wine and beer for New Years, and other essentials like paper towels etc. For its part, Tymac donated the vessel and crew to get the donations to the Hanjin Scarlet as well as brand new hoodies, toques and warm pants. RCM-SAR assisted in getting the Victoria Filipino Association and their donations from Victoria to Saturna and back. “It was an incredibly humbling experience,” said Hnatko. “You don’t realize how fortunate you are to be able to see and hold your family (and in your home country nonetheless) until you experience something like this. And to see the crew as happy as they were to receive things that we often take for granted during the holidays (the ability to have turkey or ham or even an alcoholic beverage in celebration) was pretty amazing.”
Volunteers from B.C.’s maritime industry approach the Hanjin Scarlet.
Tymac donated the use of the Tymac Spray for the journey from Vancouver to Saturna Island. 52 — BC Shipping News — February 2017
Photos: Dave Roels (www.daveroels.com)
New friends — The Hanjin Scarlet crew and volunteers from B.C.’s marine industry.
For his part, Jason Woods with the ILWU Local 400, described the effort as a “typical Canadian response.” Growing up in a family of sailors, Woods said that he understands what it means to be away from family during holidays and was only too happy to co-ordinate the exercise on behalf of B.C.’s maritime community. “This was a ‘sailor to sailor’ thing,” he said. “To be stuck in these circumstances, especially during Christmas, is very difficult. If our donations help make the holiday a bit more enjoyable for the crew, we’re happy to help.”
Woods also noted that while there are two Hanjin vessels anchored off the B.C. coast, the other vessel, the Hanjin Vienna, is owned by a German company who are ensuring that crew have access to food and other amenities. “It’s a hard situation for the crew stuck in limbo,” he said. “There are Hanjin vessels and crew around the world in similar situations and I only hope other countries will recognize their needs and provide relief.” Special thanks to Dave Roels for some amazing photos! For more photos, visit www.bcshippingnews.com.
Happy and grateful Hanjin Scarlet crew.
RCM-SAR provided transport for the Victoria Filipino Association. February 2017 — BC Shipping News — 53
Photo: Dave Roels
ADVERTISERS
Your donation will help us “Save Lives at Sea” Email: info@canadianlifeboatinstitution.org
www. canadianlifeboatinstitution.org Registered Charity #88999 8977 RR0001 54 — BC Shipping News — February 2017
AAL Shipping............................. 4
Lloyd’s Register......................... 7
Adonis....................................... 9
Lonnie Wishart Photography.... 54
Arctic Shipping Summit............ 44
Marit-Tech 2017......................IBC
Bernard LLP............................. 46
Mercy Ships............................. 44
Bracewell Marine Group...... 52/53
Mission to Seafarers................ 45
Canadian Lifeboat Institution..... 54
Nanaimo Port Authority............ 31
Chamber of Shipping................ 21
NIBC Conference 2017............. 42
CN Rail - Prince Rupert............BC
Osborne Propellers................... 36
CN Rail - Port Saint John.......... 27
PATH (Port of Alberni).............. 22
Council of Marine Carriers: B.C.
Port of Prince Rupert............... 29
Towboat Industry Conference... 32
Port of Vancouver................... IFC
Dave Roels Photography.......... 45
Redden Net & Rope.................. 51
Envirosystems........................... 9
Robert Allan Ltd....................... 11
Fraser Surrey Docks................. 15
Seafire Training........................ 45
Gillispie Munro Inc................... 21
Seaspan Vancouver Shipyards.. 23
Greenwood Maritime Solutions... 9
Sylte Shipyard.......................... 10
Harken Towing......................... 19
Tactical Marine Solutions Ltd.... 37
IMS Marine Surveyors &
Tidal Terminals (CT Terminals).. 17
Analytical Laboratories Ltd....... 26
Vancouver Int'l Maritime Centre.. 3
Int’l Sailors’ Society Canada..... 47
Vancouver Maritime Museum... 54
John Horton, Marine Artist....... 19
Western Maritime Institute........ 16
Jones Marine Group Ltd............. 8
Western Stevedoring................ 13
www.mari-tech.org/mari-tech-2017
10 YEARS TOGETHER
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