BC Shipping News - February 2019

Shipping Emissions: How will the industry get to zero?

Aids to Navigation: Canadian Hydrographic Service

Cargo Logistics: Nanaimo’s BC Vehicle Processing Centre

BCSHIPPING Commercial Marine News for Canada’s West Coast.

Volume 9 Issue 1

NEWS

www.bcshippingnews.com

February 2019

Industry Insight

Chamber of Shipping’s state of the industry report

Grain Exports

P&H and partners set the path for growth on the West Coast

Cargo Surveys A primer on cargo sampling FEB

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CONTENTS February 2019 Volume 9 Issue 1

Cover Story 36 40

9 10 14

EDITOR’S NOTE

By Jane McIvor

20

IN BRIEF

Industry traffic and news briefs

INDUSTRY INSIGHT

State of the industry report Marine transportation faces more complex issues than ever before Robert Lewis-Manning, President, Chamber of Shipping Lewis-Manning reports on the plethora of issues facing the industry — major government regulations, environmental challenges, expectations for energy projects and more.

23 25 27 31 34

14

23/25

PORTS & TERMINALS

Port of Hamilton: A story of sustainability and growth

By Captain Georges LaRoche

AIDS TO NAVIGATION

Canadian Hydrographic Service Enabling Canada’s economy through safe and efficient navigation

By David Prince

HISTORY LESSON

44

GRAIN EXPORTS I

46 FINANCE

GRAIN EXPORTS II

48 TECHNOLOGY

Building British Columbia The early days of maritime law and financial order

By David R. Leverton

Protecting your company from payment fraud (Part I)

By Andrew Kostiw

P&H set to double capacity on the West Coast

Alliance Grain Terminal upgrade signals growth opportunity for partners

CARGO SURVEYS

A primer on cargo sampling

By Richard Smith

LEGAL AFFAIRS

Recent changes to the Canada Shipping Act and the Marine Liability Act

By Elyn Underhill

PolarConnect brings highbandwidth data service to the Arctic

By Jeffrey Osborne

50

SHIPPING EMISSIONS

How will the industry get to zero emissions shipping?

By Dr. Mary R. Brooks

EVENT RECAP

ABCMI Conference Attendees offered key intelligence on upcoming opportunities

CARGO LOGISTICS

Nanaimo’s BC Vehicle Processing Centre Setting the service bar high

By Laurie Jones

40

On the cover: Alliance Grain Terminal (photo: BC Shipping News); above: the Tokyo Bulker (photo: BC Shipping News); right: a multibeam survey image from a recent survey near Kunga Island, Haida Gwaii (photo courtesy CHS.); left: Robert Lewis-Manning (photo courtesy Chamber of Shipping) February 2019 — BC Shipping News — 7

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February 2019 Volume 9/Issue 1

BC Shipping News is as much a business journal as it is a forum for the industry. With informative, educational and entertaining articles, BCSN is a vehicle for discussion on local, national and international maritime issues.

Publisher McIvor Communications Inc. President & Editor Jane McIvor

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International Sailor’s Society Canada

EDITOR’S NOTE Photo: Dave Roels

What will the new year bring?

A

s has become tradition for the first issue of the year, we are pleased to again feature the President of the Chamber of Shipping, Robert LewisManning, with his annual state of the industry report. The title very accurately sums up what to expect in the year ahead (“Maritime transportation faces more complex issues than ever before”), and while many of the challenges will be familiar to readers, Lewis-Manning’s insights are a valuable resource for a greater understanding of what the industry faces.

Despite the challenges, Lewis-Manning is spot on when he notes that the industry continually proves its resiliency and will do so again and again. Other articles herein prove that out. For example, the new Fraser Grain Terminal at Fraser Surrey Docks

designs@ral.ca

and upgrades to Alliance Grain Terminal are in response to the growing operations of Parrish & Heimbecker and partners.

Through improved rail capacity and terminal access, additional efficiencies are continually being found with the help of the railways and the Port — all of whom are working together to get exports to the water and off to international markets.

Nanaimo’s BC Vehicle Processing Centre is another example of innovative thinking and response to logistical challenges. The new centre opens up new possibilities for the Island port and, even more exciting, new possibilities for the increased use of short sea shipping.

Always trying to provide checks and balances, make sure you read the article from Dr. Mary Brooks (Dalhousie University and

www.ral.ca

award-winning expert on maritime-related topics) on shipping emissions. Despite the challenges presented, she remains positive that industry and researchers will work together toward global solutions.

And don’t miss Elyn Underhill’s article where she echoes Lewis-Manning’s concerns about upcoming changes to the Canada Shipping Act and the Marine Liability Act. Underhill adeptly raises questions that still require answers.

As we head into 2019, I’m sure we’ll see much of the same and more when it comes to weathering the tests we face as an industry. And we’ll meet these challenges as we always do, with resiliency, innovation and collaboration.

— Jane McIvor

1+604-736-9466

February 2019 — BC Shipping News — 9

INDUSTRY TRAFFIC

Prince Rupert Port Authority invests in Skeena River salmon

T

he Prince Rupert Port Authority has announced an initiative to support salmon enhancement in the Skeena River watershed.

The Skeena River Salmon Enhancement Program dedicates $1 million from PRPA’s Community Investment Fund specifically to partner with local organizations on projects that increase salmon stock productivity and the maintenance and rehabilitation of critical habitat in the Skeena River watershed. The fund will also seek to support innovative pilot projects that will achieve these objectives and support the health, resilience and sustainability of Skeena River salmon during this International Year of the Salmon.

The program is focused on working with regional partners such as First Nations, non-governmental organizations, and community groups.The program also provides the opportunity to partner with other agencies and organizations leading similar initiatives to leverage additional financial resources toward this important priority. In addition to monetary support, PRPA is also seeking ways to

Innovation in Harbour Towage

www.samsontugboats.com 10 — BC Shipping News — February 2019

Photo credit: Dave Roels

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share capacity and data from its existing environmental stewardship programs to enhance new and existing salmon-related initiatives.

PRPA recognizes that a healthy salmon population is vital to not only the community of Prince Rupert, but to the entire northwest region. Its importance to the economic, environmental, social and cultural fabric of our communities, in particular First Nations peoples, has justified its inclusion as a focus for PRPA’s community investment. The organization wants to be part of a local solution to address some of the critical challenges that are facing Skeena salmon.

“The Prince Rupert Port Authority has seen many projects come to fruition and make a difference through our Community Investment Fund. Dedicating resources entirely to salmon and their habitat will hopefully see similar success in an area that requires extra focus,” said Shaun Stevenson, President & CEO of the Prince Rupert Port Authority. “We take our commitment to the environment seriously, and a strong salmon population is crucial to a healthy ecosystem on the north coast and ultimately, a healthy community.”

The program is ready to start evaluating relevant initiatives immediately, and PRPA asks that any group working in salmon enhancement and protection to contact them to discuss their projects. PRPA will also be conducting outreach in the coming weeks to familiarize northwest hatcheries, non-governmental organizations and relevant community groups about the program.

NEWS BRIEFS

Reliving life at sea in the 1960s

F

or those mariners who began their careers many years ago cleaning out cargo holds, servicing ballast tanks or greasing cables, No Ordinary Seaman is a story that will take you on a trip down memory lane. For those just starting out, the tale will give you a glimpse into life at sea when “safety” was an afterthought, crew were hired off the dock and throwing cement powder on oil spills was the norm.

Gary Karlsen has written a book for all ages. His original intent of travelling by ship to Stavanger, Norway, from Vancouver, B.C., leads to an adventure that takes him around the world and into contact with unforgettable characters and places. Not only does the book provide valuable insights for today’s mariners into how much the industry has changed in the last 50 years, it does so with a clever writing style filled with humour.

The tale begins in 1965. Karlsen had just graduated highschool and, rather than take his father’s advice to go immediately to

university, he opts for the path less travelled.

Taking creative liberties with his experience, Karlsen ends up as a deckhand on the M/S Havkatt, a three-year-old, Germanbuilt bulker with a full cargo of grain destined for Japan.

From the first days of seasickness and finding his sealegs to the arrival in his first foreign port, Karlsen describes characters and incidents that will resonate with all mariners young and old. And from loading lumber at Harmac in Nanaimo, travelling through the Panama Canal to New York and from there onto an oil tanker traversing the waters of the North Sea, North Africa and the Red Sea, the story intertwines ship knowledge with the relationships between captain and crew, crew and dock workers and even crew and local residents.

Finally making his way to Norway where he meets his extended family, Karlsen’s memoir is a coming-of-age story complete with lessons learned and goals achieved.

And in a story where the journey turns out

to be more than simply a means to an end, Karlsen’s recollections will resonate with local mariners.

Karlsen’s book can be ordered online at www.noordinaryseaman.com. It’s well worth the read.

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February 2019 — BC Shipping News — 11

NEWS BRIEFS Humanitarian leader appointed as CEO for Mercy Ships Canada

T

he Board of Directors for Mercy Ships Canada is pleased to announce the selection of Mr. Jamie McIntosh as Chief Executive Officer (CEO) of Mercy Ships Canada. Chair of the Board, Mrs. Marilyn Collette said, “Jamie McIntosh’s significant experience in international development, human rights and humanitarian assistance combined with his strong blend of leadership and entrepreneurship will bring Mercy Ships Canada to a new level of cooperation and contribution to Mercy Ships in its efforts to impact global surgery.”

“Through two decades of humanitarian work, I have witnessed the alarming need for global surgery and healthcare,”

McIntosh said. “According to the Lancet Commission, a stunning five billion people lack access to surgery when needed.

Experts advise that this lack accounts for more deaths each year than from HIV, malaria, and tuberculosis combined. Surgical interventions aboard our ships have saved mothers from life-threatening tumors, cured fathers of blindness, healed women suffering obstetric fistula, and restored children with severe burns, windswept legs, or cleft palates.”

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Upcoming events Visit www.bcshippingnews.com for information on all upcoming marine industry events.

Cargo Logistics Canada Vancouver, B.C (February 5 to 7, 2019)

Nautical Institute BC Branch Technical Workshop: Ice and Arctic Operations Sidney, B.C. (February 18, 2019)

Vancouver Transportation Club’s Oil & Gas 2019 Summit Vancouver, B.C. (March 4 to 5, 2019)

14th Arctic Shipping Summit Montreal, QC (March 13 to 14, 2019)

Mari-Tech 2019 Ottawa, ON (April 23 to 25, 2019)

23rd B.C. Tugboat Industry Conference and CMC Golf Tournament Captain Georges LaRoche Managing Director, Senior Consultant/Advisor 1-905-328-3725 / glaroche07@gmail.com georgeslaroche.ca

Victoria, B.C. (May 2 to 4, 2019)

NIBC Conference: Arctic Seas Management Victoria, B.C. (May 22 to 24, 2019)

GreenTech 2019 Cleveland, OH (June 5 to 7, 2019)

World Maritime Rescue Congress Vancouver, B.C. (June 15 to 18, 2019)

Clean Pacific 2019 Vancouver, B.C. (June 18 to 19, 2019)

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NEWS BRIEFS

Mari-Tech 2019: Fired up for Ottawa

T

his year’s Mari-Tech conference and exhibition is set for April 23-25 in Ottawa. The event is the annual cornerstone of Canada’s marine technology, engineering education and shipbuilding sectors. Mari-Tech 2019 continues a decades-long tradition of exchanging perspectives and advancing cutting-edge ideas in pursuit of advancing Canada’s marine industry.

2019 is an important year for Canada’s industry. Changes in global naval and commercial shipping are taking place at a seemingly ever-faster pace. Almost every aspect of the industry can benefit from analysis and thoughtful discussion: efficient construction of government and commercial vessels in Canada; the import of vessels both newbuilt and for short-term cabotage use; crewing and licensing standardization; the increasing use of cyber at sea and in our shipyards; the progress of Canada’s federal National Shipbuilding Strategy; energy use and design in marine propulsion; recruitment and training of tomorrow’s people for the industry; and the prospects for export of Canada’s technology to global markets.

In numerous ways, the industry has rarely had a more promising future. The growth in global commercial shipping — steady over the past decade — combined with the increase in Canada’s exports by sea, are two indicators of this success.

The challenges for Canada’s industry are also increasingly in focus.

Foremost is the need to attract and retain talented people through various sectors, from naval architecture and project planning, to shipyard trades, skilled at-sea mariners, and a cadre of dedicated regulators and administrators in government. A second challenge is coupling innovations in technology — increasingly, the application of artificial intelligence and cyber support — to design and shipbuilding in Canada’s industry. As if more was needed, a third area is that of energy efficiency in ships, in part for economic reasons and because of the global response to greenhouse gas emissions and climate change.

All of these and other issues such as petroleum exports and the state of the global industry demand attention.

In response to critical demand, Mari-Tech 2019’s first day will feature the federal government marine procurement “Outlook” seminar. This session offers industry participants the latest in government policy and expected purchasing plans, and sets the stage for one-to-one consultative sessions with federal officials from a variety of departments over the following two days of the conference.

Speakers from the Canadian Coast Guard, the Royal Canadian Navy, Public Services and Procurement Canada and other federal government departments will be featured at this opening event.

Mari-Tech 2019 then continues over two days on April 24 and 25.

The exhibition hall will be one of the largest ever, reflecting a steady growth in recent years of Canada’s industry and the commitment of national and overseas suppliers to pursuing business. (At press time, the exhibition hall was almost entirely sold out.) Exhibitors include Babcock Canada, Innovmarine and Anixter. Sponsors for Mari-Tech 2019 include Wartsila Canada, L3 Technologies, Cahill, Lloyd’s Register, and Verreault Navigation. (Sponsorship opportunities continue to be available through March.)

Mari-Tech 2019’s theme is “Full Speed Ahead: Firing on all Cylinders.” The program builds on this, featuring keynote and technical presentations that will showcase leading-edge innovation in Canada’s marine industry including artificial intelligence in ship

design and construction, energy efficient ships, LNG bunkering, climate change solutions for shipping, safety innovations at sea, education and recruitment of people for the industry and regulation.

Mari-Tech 2019’s social events include the opening reception on Tuesday, April 23, — a fun evening at the Museum of Nature in downtown Ottawa on Wednesday, April 24, and a young professionals’ networking gathering on Thursday, April 25.

Mari-Tech 2019 is jointly hosted by the Canadian Institute of Marine (CIMarE) Engineering Ottawa Branch and the Society of Naval Architects & Marine Engineers (SNAME) Eastern Canadian Section. The two organizations are collectively the home of those interested in Canada’s marine technology sector and offer membership opportunities of a wide variety for those interested.

Mari-Tech 2019 registration and contact details, a list of exhibitors and the conference program are available at the event’s website: www.mari-techconference.ca. Be sure to register before the early bird rate expires on February 24.

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INDUSTRY INSIGHT State of the industry report

Marine transportation faces more complex issues than ever before Robert Lewis-Manning, President Chamber of Shipping

T

his time last year, I cautioned that commercial marine transportation would face unprecedented pressure to adapt to a changing environment and that the complexity of operating in Canada would only accelerate and expand in scope over 2018. It would seem that this prediction hit the mark but who would have imagined such complexity would also include the Government of Canada buying the Trans Mountain pipeline just weeks before a Federal Court quashed the approval of the pipeline’s expansion, the imposition of punitive trade tariffs by the United States and increased unpredictability from a Super-Powers trade war, or gamechanging legislative changes to the Canada Shipping Act and Marine Liability Act rushed through parliament in an omnibus budget bill. It was certainly a unique and politically-charged year and 2019 is likely to bring us a whole new set of challenges.

While it’s impossible to say exactly which drivers will affect the marine industry in British Columbia for 2019 [and beyond], we can make several educated assumptions.

While policy geeks and political nerds may appreciate the extent of issues in this forecast, the reality is that ocean carriers and their service providers will continue to operate in a highly unpredictable marketplace while concurrently facing continued tough economic dynamics, technical pressures from new global regulations, and an increasingly complicated operating framework in Canada.

Canada’s supply chain

Marine shipping serving Canada’s West Coast has and will continue to buck global trends for many commodities. Strong export

14 — BC Shipping News — February 2019

While policy geeks and political nerds may appreciate the extent of issues in this forecast, the reality is that ocean carriers and their service providers will continue to operate in a highly unpredictable marketplace... volumes for dry-bulk cargo are expected to continue. Despite Canada’s best effort to diversify and expand its trading partners through free trade agreements, slowing Asian growth may have a corresponding impact on Canadian trade. The cruise / tourism sector also continues to deliver economic benefit to B.C. as a destination of choice for an aging demographic of tourists that marvel at our beautiful cities and coastline, and of course, low dollar. Multimodal volumes have recovered although ocean carriers continue to face unique challenges adapting to new operating relationships. Locally, the population continues to grow and with it the demand for consumer products, including energy, most of which is imported and moved regionally by ferries and tugs and barges.

Canada’s supply chain was in the spotlight again in 2018 which is expected to continue this year. In response to concerns about capacity and efficiency, the Class 1 railways invested heavily in additional capacity and will continue to do so in 2019.

This approach is welcomed, but the future will potentially be subject to conflict as commodities compete for space on the rail network. Alberta has already expressed a desire to drastically increase the shipment of crude by rail as the province waits for additional capacity to move crude for export by pipeline.

Although the Government has recently been criticized for delays in rolling out funding for approved infrastructure projects, one should expect a renewed focus on infrastructure spending for transportation in 2019. The next round of funding under the National Transportation Corridors Fund began in January and proponents that are ready to move quickly will likely benefit from the Government’s generosity in an election year. As moving break-bulk cargo was so challenging in 2018, it is hoped that solutions will be forthcoming to avoid diverting cargo to the U.S.

Major legislation

There remains a considerable number of key draft legislation pieces flowing through Parliament, including the Tanker Moratorium, amendments to the Oceans Act and the controversial Impact Assessment Act. While it may have not been deliberate on the part of the Government, a delayed review of these bills by the Senate until now will likely result in considerably more debate about their intent and design, as two of them are viewed by some stakeholders as a deliberate attempt to restrict the export of Alberta’s energy.

The Tanker Moratorium has already had considerable debate with many coastal First Nations asserting that this is a key element of Reconciliation, while some other

INDUSTRY INSIGHT

Potential changes to the Pilotage Act, the Canada Shipping Act, the Marine Liability Act, the Oceans Act, the Impact Assessment Act, the Species at Risk Act and the Tanker Moratorium promise to make 2019 an interesting year for the industry.

First Nations groups are claiming that the moratorium and the Government’s lack of consultation ahead of its implementation contravened their rights and potential economic opportunity. This precedent-setting legislation was never the product of good public policy and will add little in the way of practical protections for the North

Coast — an unfortunate consequence of a political decision that did not consider the concerns of the many stakeholders.

Although the Oceans Protection Plan aims to improve responsible shipping and build the confidence of coastal communities, this effort appears misplaced, misguided and completely ineffective.

The Impact Assessment Act will also receive its final scrutiny and should be of interest to maritime transport providers as it has the potential to impact future projects such as port terminals, mines, pipeline, etc. If enacted, this legislation would repeal the Environmental Assessment Act and potentially remove the responsibility of

O NE MI LLI ON S T R O N G & C O U N T I N G THANK YOU TO ALL OF OUR PARTNERS FOR MAKING IT POSSIBLE

In 2018, the Port of Prince Rupert celebrated 1,000,000 TEUs handled in a calendar year. This milestone is significant in that it not only supports our vision for making Fairview Terminal the largest container terminal in Canada, but it also represents the dedication and determination of all of our partners who work to enable trade through the Prince Rupert gateway.

Here’s to reaching the next million TEUs together!

@rupertport

INDUSTRY INSIGHT port authorities to conduct environmental assessments of certain projects.

The Government has also signalled its intent to table amendments to the Pilotage Act in 2019. After a lengthy review process and significant consultation, the Chair of the review issued a report making a series of recommendations which covered everything from governance and labour models to tariffs and safety. Some of the recommendations remain highly contentious amongst certain stakeholders and it remains to be seen which of the 38 recommendations will survive through to the tabling of formal legislative amendments. With only approximately 10 weeks of parliamentary time remaining before the summer recess and the 2019 election campaign, the only potential way that the Government could table amendments would be as part of the 2019 Budget bill.

Major energy projects

Last year was another tumultuous year for energy projects in Canada. It included theWMI-BCSN quashing the approval the Trans HALF of PG Ad-June 2018.pdf 1 of 6/8/2018 2:29:35 PM Mountain Expansion Project by a Federal

Court followed by the National Energy Board kicking off of a focused reconsideration of the environmental impacts of project-related marine shipping. Fortunately, 2018 also included a positive financial investment decision by the five-partner companies of LNG Canada — a $40-billion infrastructure project that will bring the province’s natural gas to Kitimat for export to Asian markets starting in 2023-2025.

In 2019, the outcome of the reconsideration of the Trans Mountain Expansion Project could have ramifications for marine transportation beyond project-related vessels. There is little doubt that Canada is being evaluated on its ability to provide predictability in the regulatory process.

It is also clear that the impacts of projectrelated shipping are no longer being viewed in isolation. The cumulative impacts of incremental increases or changes to marine transportation are now highly scrutinized by regulators, governments and the public. The reconsideration of this project has already focused on numerous key marine transportation topics, including governance, reconciliation, cumulative impacts,

greenhouse gases, alternative fuels, species at risk, the management of marine traffic and anchorages and spill response — a lengthy shopping list of challenges that will dominate the marine transportation landscape for the next decade. Many of these challenges are multi-faceted and will go well beyond the responsibility and capability of a single project proponent to address.

Species at risk

The plight of the Southern Resident Killer Whale became highly politicized in 2018 after the world witnessed Tahlequah (J35) grieve by carrying her dead calf for 17 days in local waters. In Washington State, Governor Inslee implemented a Task Force that hurriedly developed a range of short and longer-term recommendations which was followed by a state budget that included $1.1 billion in SRKW-related investments. In Canada, the Federal Government, for the most part, remained focused on its long-term recovery strategy including the implementation of pragmatic voluntary measures by the commercial marine industry. This

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S im u l at o n e w B r id g e

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Industry Canada

Industrie Canada

campuses

Ladysmith, Steveston and North Surrey (coming soon)

INDUSTRY INSIGHT was largely due to the significant success of the industry’s trial measures in 2017 and implementing voluntary measures in 2018 through the Vancouver Fraser Port Authority’s Enhancing Cetacean Habitat and Observation (ECHO) Program.

This year will see an expansion of protective measures for Southern Resident Killer Whales. The marine sector and Federal Government have been progressing the development of a Conservation Agreement, which, if successful, will provide a five-year predictable commitment to implement protective measures, enhance scientific research and address operational and commercial impediments. If an agreement is struck, it would be the first such agreement under the Species at Risk Act in Canada for the coastal environment. The alternative to such an agreement would likely be a regulated path that would be less protective to the species, more punitive and less flexible to the sector and would discourage future innovation.

Protecting species at risk is here to stay for the marine sector and, as we increase our awareness of additional species, there will be greater pressure on the marine transportation system to adapt in order to mitigate negative effects from operations. While mariners have always been aware of endangered whales, the next year will likely bring new challenges that include certain breeds of marine birds (aka the Pink-Footed Shearwater) and aquatic species including endangered fish.

principles of reconciliation is Proactive Vessel Management. Officially, this program “aims to reduce conflicts between local waterway users and protect environmentally and culturally sensitive areas.”

Practically, it is not yet clear how this will evolve into a pragmatic and collaborative relationship that is focused on 20190060-Gillespie-Munro Ad 7.5x4.87-hi.pdf

1

2019-01-09

non-regulatory solutions. If this program takes a traditional approach to consulting industry, then industry will most likely approach Proactive Vessel Management as it does any regulatory process. If it is to become a truly transformative forum for relationships, especially for coastal First Nations, then the Federal Government is

11:39 AM

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Steel & Surplus

Reconciliation with First Nations

I have written previously about the necessity to better understand and support improved relationships with Indigenous Peoples and, most importantly, how this relationship has great potential to transcend all aspects of our industry’s operations in coastal waters in the future, especially in the Pacific North West. In 2018, the Government of Canada signed a Reconciliation Framework Agreement with 14 Northern Coastal First Nations in British Columbia that included guiding principles for their evolving relationship.

Subsequently, we saw amendments to the Canada Shipping Act that included provisions for Indigenous groups (and provinces) to enter into agreements with Transport Canada to administer and enforce aspects of the same Act. One of the tangible programs of the Oceans Protection Plan that embodies

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INDUSTRY INSIGHT going to need to signal its vision more clearly as it relates to evaluating, managing and mitigating risk from commercial shipping.

The Federal Government’s lack of clarity and direction on risk management

is of significant concern and beginning to impact Canada’s competitiveness in unexpected ways. These impacts are manifesting in the numerous programs under the Oceans Protection Plan, in the evaluation

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of projects, in day-to-day vessel operations and more generally with coastal communities. Left unchecked, misperceptions can grow into public opinion and mistrust, potentially constraining Canada’s ability to expand trade globally.

In summary

The increasing list of complex drivers might seem daunting, but the marine industry continues to learn, adapt and innovate to address the many challenges. The upcoming Federal election is an opportunity for the marine sector to propose a renewed focus of priorities to the Government that balances and better integrates the programing under the Oceans Protection Plan with the necessity to improve Canada’s supply chain competitiveness. The Government of Canada needs to recognize that a supply chain that is optimized for efficiency and productivity will best support Canada’s objectives to address climate change and coastal protection. Ocean carriers, shippers, terminals and ports need a predictable and less bureaucratic business and operating environment in order to reach their full potential.

Vancouver Transportation Club announces its official sponsorship of Canada Energy Exports – Oil & Gas Summit to be held on March 4 and 5, 2019 at the award-winning Vancouver Convention Centre located at 999 Canada Place, Vancouver, B.C. The summit will provide a platform for LNG and Oil Traders, Ship Operators, Environmental and Public Groups to discuss logistical issues with the export of Oil & LNG. There will be presentations and discussions on the environmental responsibility and economical sustainable export of energy resources through the ports of Western Canada.

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HISTORY LESSON Building British Columbia

The early days of maritime law and financial order

By David R. Leverton, Executive Director Maritime Museum of British Columbia

W

One has to step back in time to appreciate the

ithin a short, five-minute walk between Wharf Street and Bastion Square is the old Victoria Custom House, also referred to as the Malahat Building, and the former Victoria Law Courts — two of the most important historic landmarks that influenced the early years of maritime commerce and shipping in British Columbia. Construction of the Victoria Custom House commenced in 1874 and was declared a National Historic Site of Canada in 1987. Construction of the former Victoria Law Courts started in 1889 and was declared a National Historic Site of Canada in 1980. One has to step back in time to appreciate the significance of these two buildings and the role they played in the administration of maritime law and order and the raising of customs duties and excise taxes once the United Colony of British Columbia became the Dominion of Canada’s youngest province.

The Crown Colony of Vancouver Island was originally created in 1849 and the Mainland Crown Colony of British Columbia in 1858 with the discovery of gold in the Fraser Canyon. The two colonies were eventually united in 1866 and the former capital of the mainland colony was moved from New Westminster to Victoria which had been incorporated in 1862 and was the former capital of the Vancouver Island Colony. At the time of this amalgamation, the newly formed United Colony of British Columbia was heavily in debt due largely to high infrastructure costs associated with the rapid development of several new gold rush communities including Barkerville and Lillooet. The building of the Caribou Wagon Road had in large part bankrupted the United Colony. The United Colony was in desperate need of government-funded services to support this growing inland population and these necessary community outposts. At the time, it was hoped that royalties and licence

significance of these two buildings and the role they played in the administration of maritime law and order...

Michal Klajban [CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0)]

revenues would help offset some of these burgeoning infrastructure costs.

The Dominion of Canada needed a strategic West Coast continental connection. There was no Panama Canal which meant a voyage of more than 13,000 nautical miles from Halifax to Victoria via Cape Horn for ships sailing from eastern Canada. Most of the tonnage was moved using wooden-hulled sailing ships. Victoria’s shipbuilding industry began in 1859 at the foot of Dallas Road at Laing’s Way. The United Colony eventually established a large ship servicing industry to support imports of much needed bulk cargoes to the expanding number of new settlements and the continued export of natural resources that had started during the early years of the Hudson’s Bay fur trade with local First Nations.

B.C.’s willingness to join the Dominion of Canada depended largely on the completion of a new trans-continental railway; Ottawa’s absorption of the United Colony’s debts and liabilities; and funding for a first-class new graving dock in Esquimalt.

On July 20, 1871, B.C. officially joined the Dominion of Canada.

The new deal also meant that the existing provisions of the British North America Act, 1867, would be applicable to B.C. in the same way and to the same extent as they applied to the other Provinces. It

The Victoria Custom House.

20 — BC Shipping News — February 2019

The Victoria Law Courts.

MARITIME MUSEUM OF BC was agreed that the existing customs tariff and excise duties would remain in force in B.C. until the railway from the Pacific Coast and the system of railways in Canada were connected. The collection of excise taxes and duties on goods being imported was an important source of much needed revenue since the taxing of individuals and corporations did not begin until the introduction of the Income War Tax Act in 1917. Construction of the Victoria Custom House began in earnest in 1874 and today it is the oldest building of its kind in Western Canada.

The construction of the Victoria Law Courts is another direct result of the new legal agreement between the Dominion of Canada and B.C. due to the importance of maintaining law and order both on land and on water.

The earliest forms of maritime law occurred in areas belonging to what was known as the Continental legal tradition. This formed the basis for the early Admiralty Law of England and is the origin of the common law legal tradition that was responsible for regulating maritime shipping to and from Victoria during the period of 1866 -71. Contemporary maritime law governing the movement of goods is a mixture of ancient doctrines and the English system of Admiralty Law that was inspired by the three arches of modern Admiralty Law — namely the Laws of Visby, the Laws of Hansa Towns and the Laws of Oleron.

Among the traditional principles of Admiralty Law still in use today are marine insurance, general average and salvage. The welfare of the seaman and the ancient concept of ‘maintenance and cure’ are also still in use. The main reason for the continuous use of ancient principles of law is the unchanging nature of the basic hazards associated with seafaring. The original consolidation of maritime laws in the United Kingdom was referred to as the Merchant Shipping Act, 1867.

In 1897, the International Maritime Committee created uniformity within maritime law that included the Hague Rules (International Convention on Bill of Lading), the Visby Amendments (amending the Hague Rules) and the Salvage Convention amongst others. Since 1958, there has been a move towards more uniform maritime laws that are being overseen by the International Maritime Organization (IMO). The Canada Shipping Act that is regulated by Transport Canada governs maritime shipping laws within Canadian waters in association with other federal laws regulated by such departments as Environment Canada and Fisheries and Oceans Canada.

The British Admiralty courts were established to resolve disputes between merchants and seaman and eventually included the enforcement of customs and criminal charges related to smuggling and piracy on the high seas. British colonies were routinely granted the subsidiary jurisdiction through independent Vice-Admiralty courts. These civil courts were granted the power to interpret colonial legislation provided these interpretations did not conflict with Admiralty Court decisions or British maritime law. The ViceAdmiral courts were juryless and the presiding judges were granted five per cent of the confiscated cargo from any guilty verdicts. The legal concept of the high court was that a defendant was presumed guilty until they proved themselves innocent. Failure to appear as commanded resulted in an automatic guilty verdict. The British Admiralty Courts were domestic in nature however they were also used to solve international disputes and are still used today.

The Vice-Admiralty Court for British Columbia was established in the former Court House Building at 28 Bastion Square.

Construction of the new building began in 1887 and the Law Courts were opened in 1889. The new trans-continental railway was finished in 1885.

The Victoria Law Courts were the first major public building constructed by the provincial government after the formal union with Canada. The completion of the new building marked an important step in the evolution of British Columbia’s court system and the start of a new program to construct courthouses in judicial districts throughout B.C. Trials were held in the building until 1962 and played an important role in interpreting maritime law for many decades. The investigation into the tragic sinking of the S.S. Princess Sophia, the largest shipwreck disaster along the Pacific Northwest coast, began in the Vice-Admiralty Court on January 10, 1919. The building was also the home of the Maritime Museum of British Columbia for 50 years from 1964 until 2014.

The next time you’re visiting Victoria, take a five minute stroll along Wharf Street and Bastion Square and imagine what it would’ve been like to have witnessed the construction of these two amazing buildings and the significance they played in administering the rule of law and the raising of customs duties and excise tax revenues during the early days of the province’s entry into Confederation.

On July 20, 2021, B.C. will commemorate its 150th Anniversary of becoming Canada’s sixth province.

David R. Leverton has served as Executive Director of the Maritime Museum for the past three years and recently co-authored Those Who Perished: The Unknown Story of the Largest Shipwreck Disaster along the Pacific Northwest Coast. David can be reached at dleverton@mmbc.bc.ca

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GRAIN EXPORTS

P&H set to double capacity on the West Coast

W

ith the start of construction on the Fraser Grain Terminal (FGT), a new export facility at Fraser Surrey Docks, Parrish & Heimbecker, Limited (P&H) is now well positioned to effectively double their capacity to export Canadian grain and specialty crops to growing markets in China and South East Asia from Canada’s West Coast. “P&H has grown substantially to support Canadian farmers and overseas customer demands,” said Casey McCawley, Vice President of West Coast Operations.

“This project demonstrates our unwavering investment in the supply chain to build strong business relationships with customers around the world.” Indeed, Fraser Grain Terminal is a key part in an overall program that is seeing new inland terminals constructed as well as expansions and upgrades to existing facilities.

Background

Parrish & Heimbecker, Limited has been a name in the grain trading business for 109 years. With their origins in flour milling and grain handling — activities that are still done today — the company has grown to encompass over 1,500 employees, 60+ locations across Canada and a well-established network of trade links around the world.

“We’re in the grain transportation business,” said McCawley. “P&H is committed to investing in assets that move grain from the farmgate to end users around the globe as efficiently as possible. While grain transportation is one aspect of P&H, we are diversified within the agriculture sector and in addition to being the largest Canadianowned milling company, we’re growing our farm inputs, feed manufacturing and pea processing businesses,” added McCawley.

On the West Coast, P&H is partnered with Paterson Global Foods and Northwest Terminals of Unity Saskatchewan in the Alliance Grain Terminal on the south shore of Burrard Inlet. They also have a container stuffing business in Cloverdale. Along with P&H’s current operations at Fraser Surrey Docks (FSD), P&H’s current combined capacity, stands at roughly over three million tonnes. This includes the gains seen from a recent $55 million investment at AGT for a new shiploader and gallery upgrade that was completed last fall (for more on this,

Once completed in late 2020/early 2021, the new facility will be used to ship bulk grain products including wheat, barley, oil seeds, pulses and other specialty grains. see BC Shipping News’ interview with David Kushnier, CEO of AGT on Page 23).

As for the current facility operating as a joint venture with FSD for the past six years, McCawley explained that the original business plan was for a flat storage shed to handle canola meal and distiller dried grains. While planned throughput was for 250,000 tonnes per annum with a capacity of up to 500,000 tonnes, “we actually did over one million tonnes in 2017/18 because we needed the extra grain capacity,” he said, adding that even after the new facility is up and running, the existing flat storage system will continue to handle proteins like canola meal and others that don’t handle well through conventional silo storage systems.

New terminal

Once completed in late 2020/early 2021, the new facility will be used to ship bulk grain products including wheat, barley, oil seeds, pulses and other specialty grains.

The throughput of 3.5 million tonnes per annum (Mt/a) will bring the total capacity for the Fraser Surrey site to four Mt/a with the 0.5Mt/a from the existing joint venture facility.

The new facility will have a modern design that minimizes noise and dust from grain handling operations and will replace an aging and obsolete manufacturing warehouse on vacant port land that has not been used for several years. The main construction projects for the terminal include: • A rail unloading station; • A transfer system comprising one transfer tower and fully enclosed aboveground conveying equipment with a built-in dust suppression system; • Twenty-five above-ground steel storage silos; • Three shiploaders which will be shared between the existing facility and the new terminal, replacing the existing portable shiploader;

The site plan for the Fraser Grain Terminal at Fraser Surrey Docks.

February 2019 — BC Shipping News — 23

GRAIN EXPORTS • A semi-loop rail track; • Realignment of an existing rail track; • Extension to three existing rail holding tracks in an area to the north east of the main grain facility site to reduce shunting during unloading; • Construction of an integrated truck and railcar loading facility and container loading facility with associated container storage yard; and • Construction of ancillary buildings — administration building, maintenance shop, and electrical rooms.

The terminal will load approximately 80 bulk vessels per year (about one to three vessels per week), including Panamax, Supramax and Handy-size ships. While most vessels will be fully loaded at the Fraser Grain Terminal facility, larger class Panamax vessels will be loaded to the maximum capacity according to guidelines for the river draft of 11.6 metres and may be topped up at a deep-water terminal. With its integrated container loading component, FGT will be the only container loading facility in the Lower Mainland able to unload unit trains. To add to its efficiency, FGT’s location on the South Fraser Perimeter Road allows convenient access to Deltaport, Canada’s largest container terminal for product not destined for bulk vessels.

P&H is working with several container shipping lines to incorporate the new terminal as an off-dock location to position inbound containers to be filled with grain for export. Containers will be trucked to container export terminals, like Deltaport but McCawley’s vision for the future also includes investment in short

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sea shipping to utilize FGT’s location on the Fraser River. “We could provide an economical, efficient alternative that also produces less emissions than high volumes of truck movements on congested Lower Mainland roads.” A small amount of product will be destined for distribution to customers in the Fraser Valley as well.

Getting to yes

As any applicant of a capital project can attest, the permitting process in Canada is extensive and robust to say the least. McCawley suggested a similar experience in getting approval for FGT. “It took two and a half years,” he said, “during which we completed 310 studies and a rigorous public consultation that included 14 First Nations.”

While overall feedback was positive and McCawley and his team took a direct, transparent approach to ensuring all questions received answers and all issues were identified and addressed, one snag in the process came when a small design change to the silos mid-way through the process required a repeat of the consultation process. “It was very time consuming, but we took it very seriously and I believe the community and stakeholders appreciated our efforts,” he said.

McCawley developed a renewed appreciation for the history of the Fraser River and its importance to Indigenous communities.

Rail capacity

Key to the location for FGT and for P&H’s overall logistics chain is ensuring rail capacity that can support terminal throughput.

“The FGT site is serviced by CN, CP, BNSF and SRY railways.

The value proposition for P&H is industry-leading car cycle times from prairie to port without having to make a lot of infrastructure investments to alleviate some of the bottlenecks you see getting to both the south and north shores of Vancouver Harbour,” McCawley said, adding that at some point, he would like to see CP being able to deliver directly to the terminal for increased efficiencies. “Right now, it is working fine but we do see efficiencies that can be gained once volumes start to increase.”

Meeting and exceeding capacity

While the terminal is under construction, P&H has laid out a multi-year plan that involves new builds and expansion of existing inland facilities. “We recently opened up a new grain terminal and crop input centre in Viking, Alberta,” McCawley said. “It has a 46,000-tonne grain storage elevator, a 25,000-tonne dry bulk fertilizer shed and is all attached by a CN 150-car loop track. We also just announced another new terminal and crop input centre to be built in Gilbert Plains, Manitoba.”

In addition to these, McCawley announced a recent partnership agreement between P&H and GrainsConnect Canada, a joint venture between Australia’s GrainCorp and Japan’s Zen-Noh Grain Corporation. Under the agreement (which is still subject to regulatory approval at the time of writing), FGT will become a 50-50 joint venture. “Together, we’ll be at full capacity at the terminal quite quickly,” he said.

That led to the question of future expansion and McCawley said there were opportunities to improve on things like rail access — for example, constructing overpasses to allow for longer trains — as well as operational efficiencies, but with Fraser Surrey Docks currently for sale (excluding FGT and the joint venture) no definitive plans have been made yet.

For now, McCawley is excited about the investments being made to ensure P&H’s growth on the West Coast. BCSN

GRAIN EXPORTS

Alliance Grain Terminal upgrade signals growth opportunity for partners

J

ust a few years short of celebrating its 100th anniversary, Alliance Grain Terminal (AGT) has once again undergone modifications to match the growing Canadian grain export industry. “The terminal opened in 1923 with 20 bins,” said CEO David Kushnier. “Today, we’re targeting throughput of about 3.5 million tonnes per annum.” Meeting — and exceeding — that target has been made possible with the latest modernization project completed last fall.

In 2007, Parrish & Heimbecker Ltd. (P&H), Paterson Grain (a division of Paterson Global Foods) and Northwest Terminal acquired AGT (previously called United Grain Growers Terminal) from Agricore United. At that time, the facility was putting through about 1,200,000 tonnes. Along with the acquisition, Kushnier was appointed to the CEO position and has been leading operations ever since. “The first year we did about two million tonnes.

By 2017, we had increased that to 2.8 Mt/a and now, with our latest round of upgrades, we expect to put through 3.5 Mt/a,” he said, adding that additional operational efficiencies could see that rise to 4 Mt/a.

“All of the partners of AGT have built new facilities and expanded others across Canada,” Kushnier said. “The terminal played a large part in allowing them to do that, giving them additional access to international markets and maintaining a leading position in the grain export market.”

The $55-million modernization project which took one year to complete involved replacing the existing shipping gallery; new piles and new foundations; a new conveyor gallery which is about 10 metres higher and 46 metres longer; a new conveyor and mobile tripper system on rails equipped with two high-capacity loading spouts; an enclosed conveyor and enclosed chute; and modification to bollards on the north end of the pier. Speed of loading, increased capacity, dust control and overall functionality were key priorities for the extensive remodel.

In describing some of the efficiencies gained, Kushnier said that prior to the

David Kushnier, CEO, Alliance Grain Terminal. upgrade AGT’s load rate was about 600 tonnes per hour. “We’re now loading at a rate three times faster than that,” he said, “and can now achieve a rate of 2,000 tonnes per hour.”

In addition to dredging the west berth, the longer conveyor gallery means that not only do ships no longer need to be repositioned mid-way through the load, larger ships can be accommodated — up to

55,000 tonnes for the west berth and over 70,000 tonnes for the east berth.

Kushnier noted additional benefits, including improved safety, cleaner operations and better dust control through a new integrated dust suppression system which has reduced waste and improved local air quality. Another initiative currently being developed by the BC Maritime Employers Association and the International Longshore

AGT’s new conveyor gallery is higher and longer, allowing for bigger ships and eliminating the need to spin the vessel.

February 2019 — BC Shipping News — 25

GRAIN EXPORTS

Upgrades at AGT included a new shipping gallery, conveyor and mobile tripper system with two high-capacity loading spouts.

Workers Union is a method to load in the rain. Once implemented, the new method promises to increase efficiencies even further.

When asked if rail capacity will be able to keep up, Kushnier was confident it was. “There were no major changes done to the rail configuration but we purchased a second diesel engine for repositioning railcars which has effectively allowed us to operate much faster,

he said and further noted that changes within the Port —the new overpass, track changes and similar initiatives — have greatly helped improve rail efficiency. “We’re serviced by CP but we do also receive cars from CN and we’re seeing great improvements to service this year over last.”

Kushnier praised staff at the Vancouver Fraser Port Authority for their assistance on a challenging permitting process. “The people we worked with were an excellent resource and while the process took 18 months to gain approval, that was mostly a result of getting caught on the same timeline as other projects where unrelated issues would generate new questions about our project.”

Kushnier expects to reach a throughput of 4 Mt/a over the next two years and believes that, with improved logistics and rail service, even higher numbers will be reached beyond that. “The investment in AGT and the investments the partners have made across the country on inland terminals and crop input centres, prove there are more opportunities out there. By working together in partnership with the railways, the Port and other stakeholders, we’re confident the growth is there.”

One notable aside — a time-lapse video was made of the entire year-long process. It can be viewed at www.bcshippingnews.com/ photos-video. It shows Dynamic Heavy Lift’s Beast in action, an impressive 900-ton barge with a 360-degree ringer crane. If you haven’t yet seen the Beast in operation, this video provides a great example of its capabilities.

An online photo gallery of the newly upgraded terminal has also been posted to www.bcshippingnews.com. BCSN

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CARGO SURVEYS

A primer on cargo sampling

By Richard Smith, Senior Vice President Certispec Group of Companies

A

trip to the grocery store to pick up some staples for the pantry like rice, flour, peas or cornflakes is made much easier by the fact that the weight and quality of what you will be buying is marked on the packaging. We pay for our goods at the checkout and travel home knowing how much we purchased and its ingredients.

Imagine the same type of scenario when a buyer in Japan decides to purchase thousands of tonnes of metallurgical coal from a supplier in Canada. No simple trip to the local store where the coal has been prepackaged and conveniently marked with its weight and list of ingredients. Now we are looking at a ship loading the coal, in bulk, transiting the Pacific Ocean and delivering it to a port in Japan.

Though the buyer has undoubtedly already indicated to the supplier in Canada just how much coal he wants and the quality he needs for his purposes, it is a deal being made between parties a half world apart and, in some instances, who have never met or transacted business before. So

...the collection and preparation of samples needs to be very strictly controlled and monitored to ensure that a truly representative sample is provided... how does the buyer know for sure what he is buying and how much he is getting? No simple pass across a scanner at the checkout for this purchase that will involve millions of dollars.

Every year, millions of tonnes of commodities such as coal, grain, sulphur, potash, wood chips, petrochemicals, petroleum crude and refined petroleum products are loaded onto ships and exported through the Port of Vancouver to buyers around the globe. In 2017, over 37 million tonnes of coal, 23 million tonnes of wheat and other crops, 7 million tonnes of potash, 2.5 million tonnes of sulphur and 1.8 million tonnes of crude oil moved out of the Port to international markets where buyers were looking for confirmation of the quality and quantity of the goods they had purchased.

Enter independent cargo surveyors, samplers and testers — trained individuals who use industry and internationally accepted standards and operating procedures to verify and certify both the quality and the quantity of commodities loaded to deep-sea vessels.

Although they may be hired exclusively on behalf of any interested party involved in the transaction (underwriters, financiers, etc.) cargo surveyors generally act jointly on behalf of the buyer and the seller to produce certificates of weight and quality that will be binding on those parties. In such instances, they are advised by those parties of their contractual requirements with respect to weight and quality for the commodity to be inspected and will perform sampling, testing and weighing accordingly.

Loading potash in North Vancouver.

February 2019 — BC Shipping News — 27

CARGO SURVEYS

Manual sampling of potash from a moving conveyor.

Sampling from a stockpile.

These requirements usually specify the agreed-upon conditions and standards under which the quality and quantity determination will be undertaken and may include reference to specific standards produced by industry and/or internationally recognized standards from organizations such as ISO (International Organization for Standardization), ASTM International (American Society for Testing and Materials), FOSFA (Federation of Oils, Seeds and Fats Association), GAFTA (Grain and Feed Trade Association) and API (American Petroleum Institute).

It goes without saying that any laboratory analysis performed on a cargo made up of thousands of tonnes of a product, particularly one like coal that is non-homogeneous, needs to be performed on a sample that is truly representative of that massive tonnage, particularly when you remember that the sample amounts involved in much of that analysis will be measured in grams or millilitres. Try to imagine a cargo of a half million barrels (about 80 million litres) of crude oil being represented in tests that will be performed on just one or two litres of sample or a cargo of 250,000 tonnes of coal (250 million kilograms) being represented by just a few kilograms.

For this reason, the collection and preparation of samples needs to be very strictly controlled and monitored to ensure that a truly representative sample is provided to the laboratory. It is crucial to the entire loading process.

Internationally recognized organizations such as ASTM International produce standard methods for sampling and testing that have become universally adopted by parties involved in the maritime transportation of commodities like coal, petroleum and petrochemicals. Other industry driven organizations — for example, FOSFA and GAFTA — have produced similar standards for commodities such as wheat, grains and vegetable oils.

For most bulk cargoes that are being loaded to ships, these products are transported great distances from their points of origin.

Most often, this is accomplished using rail transportation and, in the case of crude oil and refined products, also involves the use of the Trans Mountain Pipeline. Products are eventually delivered into stockpiles or storage tanks at terminals in the port and then loaded via conveyors or pipelines onto the ships.

Although sampling may take place at any place within this transportation chain, for a variety of reasons it is most usual that samples

taken for the purpose of certifying the quality of a product are taken during, or immediately before, the actual ship loading. This normally occurs at a point physically located between the shore-side stockpile and the ship (as close to the ship’s rail as possible). In the case of solid cargoes, this will involve taking a sampling from a moving conveyor belt and for liquids this will mean sampling a storage tank or a flowing stream from within the pipeline connecting the storage tank to the ship.

Although sampling of the stockpiles themselves is undertaken, it is quite a complex operation involving a great deal of planning and preparation and is quite labour intensive due to the hazards involved in working on and around the pile. In terms of obtaining a truly representative sample of a cargo loaded to a ship, it is considered to be less effective than sampling off a belt throughout loading.

In some specific circumstances however, sampling from a stockpile may be required prior to the ship loading. For instance, the surveyor may be requested to take samples of solid cargoes for the determination of the Flow Moisture Point (FMP). The FMP is the point at which a granular bulk material becomes fluid and it is used to calculate the Transportable Moisture Level (TML) — the maximum moisture content for a solid bulk cargo. Transportable Moisture Levels are used by Transport Canada and shippers to evaluate if a cargo’s moisture content makes it safe for shipping. In this case, the results of such tests are best determined before loading starts.

Sampling can be undertaken by manual or automatic means. In either case, a recognized methodology will be used, as mentioned above, to collect the samples and to prepare them for testing.

Incremental samples will be taken throughout the loading which, on completion of loading will be combined and used to create a gross sample (representative of all cargo sources loaded to specific parcels or the load in total).

Based on the type of commodity, the total mass of the cargo to be loaded and perhaps some other commodity-specific properties such as granularity or moisture, the sampling methodology used will specify the amount of sample to be taken, the number and mass of sample increments to be taken throughout the load (based on loading rate and total mass), the cargo source (railcars, stockpiles, storage tanks), individual cargo parcel volumes and the manner in which the gross sample, collected during the cargo transfer, needs

28 — BC Shipping News — February 2019

CARGO SURVEYS

Probes used for sampling stockpiles.

Specially lined can for petroleum products.

Automatic in-line sampler for crude oil.

to be prepared prior to being sent to the laboratory for testing.

Regardless of the method by which the sample is extracted, it must be ensured that a completely representative sample is taken from the complete cross section of the cargo flowing along a belt, in the case of a solid, or from within the liquid flowing through a pipe. A sample scooped from the surface of cargo flowing across a belt may well include too great an amount of fine cargo particles to be representative of the cargo as a whole.

Manual sampling from a moving conveyor basically involves using a scoop of a pre-determined size to retrieve a sample off the belt at pre-determined intervals (usually about every three to five minutes) throughout the transfer to the ship. As mentioned above, the technique used by the sampler ensures that the scoop of sample taken is from across the entire cross-section of the product on the belt. These incremental samples (each about 700 g) are collected in a plastic bag and each bag will contain up to about 10 kg of product before being changed for another bag. These bags are all carefully marked with relevant data such as cargo type and grade, cargo source, cargo destination, and the amount of cargo the sample represents (the number of railcars or the weight of the cargo), etc.

On completion of the loading, these bags of incremental samples are used to make a “gross” or “composite” sample that is representative of the entire cargo loaded to the ship. The amounts of each incremental sample to be used in the gross sample are based upon the percentage of the total cargo weight that each increment represents

in this gross sample. The gross sample must be thoroughly mixed and then split using a process called “riffling” to produce several identical samples, representing the cargo loaded. These individual samples will then be sealed and distributed to several different parties including the testing laboratory where the quality certificate will be issued.

Although the manner in which the physical samples are taken, in the case of a liquid cargo, may differ to those described above, the basic process is very similar in that there will be a number of incremental samples taken prior to or during the loading that will be made into a composite sample and will represent the cargo as a whole.

One major difference between solid and liquid cargoes, in the case of manual sampling, is that normal industry practice

involves taking samples from the shore storage tanks to be used to supply the product for the load prior to the commencement of the load rather than from the product flow in the pipeline during the cargo transfer.

This is not the case when automatic, in-line samplers are used.

Samples are usually taken from the top of the storage tanks via a hatch in the roof of the tank using sample “thiefs” that are lowered into the liquid by the sampler and used to collect representative samples from different levels/layers, ensuring that any layering of product is taken into account (stratification of liquid products due to differences in temperature, viscosity and density are very common). These representative samples are then blended in the laboratory to produce a “composite” sample that will be used for

February 2019 — BC Shipping News — 29

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laboratory testing and delivery to any other interested party or sealed for retention.

In the case of liquid samples, brown glass bottles and/or specially lined cans are used to take and store samples to protect the product from ultraviolet light and possible contamination due to contact with the interior surface of the sample container. For samples of Liquefied Petroleum or Liquefied Natural Gases (LPG, LNG), specially constructed stainless-steel sample cylinders (or “bombs”) are used to take samples.

Automation of processes in cargo handling is constantly evolving and cargo sampling is no exception.

As the price of commodities continues to rise and buyers demand higher quality, the need to provide fast and accurate certification grows. As a result, the need to provide truly representative samples in an efficient and safe manner has produced a wide variety of automated mechanical sampling systems.

For solid cargoes such as coal, these systems can be extremely complex, involving multi-million dollar plants that will not only take the incremental samples but also do part of the sample prep work by crushing and riffling the samples during the loading operation.

Automation for liquid cargoes involves a completely closed, computer-operated system that retrieves incremental samples of the product flowing through the pipeline based on the amount of cargo to be loaded and the flow rate on its way to the ship.

These incremental samples are collected in a stainless-steel container which is checked for cleanliness by the sample technician prior to being installed into the system and then retrieved by the technician on completion of loading.

The sealed container is then connected to a mixer which will thoroughly mix the

contents to ensure a homogeneous blend of the product prior to testing and splitting for distribution and retention.

There is no doubt that, from a safety perspective, automation of the sampling process has improved matters greatly. The process no longer involves having someone leaning towards a moving conveyor belt and sticking a long-handled scoop into the cargo flow (in the case of bulk solid cargoes) or climbing storage tanks and having to handle hazardous products (in the case of petroleum and petrochemicals). However, experience shows that these automated systems require constant attendance and maintenance by qualified sampling technicians to ensure proper operation and, in this regard, the training and capabilities of sample technicians may have changed but their basic role in this very important aspect of the export process has not. Indeed, they are often required to quickly switch back to manual sampling techniques if the automated systems refuse to work properly.

Samples are usually sealed and retained by the surveying company for a period lasting normally 30 to 90 days following the loading in case there are any disputes. Thereafter, they are disposed of by returning them to stockpiles or storage tanks.

Richard Smith is the Senior VP for the Certispec Group of Companies which offers marine surveying, inspection, sampling and laboratory testing services across Canada, the USA, Caribbean and Africa. Surveyors, samplers and laboratory technicians from Certispec Services sample, test and certify quality and quantity on cargoes of coal, sulphur, potash, ores, petrochemicals, petroleum crude/refined products and vegetable oils being shipped out of the Ports of Vancouver and Prince Rupert on a daily basis.

SHIPPING EMISSIONS

How will the industry get to zero emissions shipping?

By Dr. Mary R. Brooks Professor Emerita, Dalhousie University

T

he October issue of BC Shipping News featured an excellent article by Michele Acciaro, Trevor Heaver and Jane Lister on the changing face of shipping. It explained the dramatic challenges climate change is posing for the industry and provided a solid history of recent efforts to manage greenhouse gas (GHG) emissions. The article closed by noting the new Social Science and Humanities Research Council of Canada-funded research program for green shipping, led by the University of British Columbia (UBC). Since the article was written, the Intergovernmental Panel on Climate Change has released its latest report and there have been a number of other news items on this issue. In this article, I explore the challenge of alternative energy sources for ship propulsion as the industry focus turns towards alternative energy as a means of vessel emissions reduction. The content is based on discussions at the Marine Board meeting in Washington on November 8, 2018.

The presentations from this meeting are available online at: http://www.trb.org/ MarineBoard/PastMBEvents.aspx.

In 2016, the International Maritime Organization (IMO) approved guidelines for the reduction of GHG emissions for 2023, including a cap on the sulphur emissions from ships at 0.5 per cent by 2020.

This requires that vessels either use compliant heavy fuel oil with the sulphur content not greater than 0.5 per cent or install scrubbers if the fuel used for propulsion is not compliant. In the longer term, emissions from ships will need to be drastically cut — as noted by the UBC team — by 50 per cent of 2008 levels by 2050 and reach zero emissions by 2100.

The focus session at the Marine Board was entitled ‘Paths to Zero Emissions Shipping’ but, as John Butler of the World Shipping Council (WSC) noted in his presentation,

What efforts will be necessary to meet the 2100 target? The conclusion reached by the panelists was that work needs to begin now to hit the 2050 target... to reach this target no fossil fuel can be used for ship propulsion. Stepping back to think about what the alternative energy sources might be, and what might be expected while the research takes place, became the focus of discussion. What efforts will be necessary to meet the 2100 target? The conclusion reached by the panelists was that work needs to begin now to hit the 2050 target because it will not be easy to reduce emissions or find alternative energy sources as effective as heavy fuel oil.

Short-term alternatives to noncompliant heavy fuel oil

The International Transport Forum recently published a report on alternative energy sources for maritime transport and did not see many suitable alternatives to

heavy fuel oil for ship propulsion (see Table 1, ranges indicating possible fuel savings) that are immediately applicable.

According to Michael Samulski of the U.S. Environmental Protection Agency, reduced emissions limits have demonstrated benefits in terms of citizen health.

Liquid natural gas (LNG) as a marine propulsion fuel, he concluded, is a near-zero sulphur option and North American and Baltic shipping regions are already well on the way to meeting sulphur targets. The North American Emissions Control Area was put in place beginning in 2012 and has been a testbed for other parts of the world.

However, sulphur dioxide is only one air pollutant in a group of pollutants that are emitted from ships. Furthermore, he noted that the U.S. is in the greatest position to

Main measures related to alternative fuels and energy Measures

CO2 Reductions

Advanced biofuels

25 - 100%

LNG

0 - 20%

Hydrogen

0 - 100%

Ammonia

0 - 100%

Fuel cells

2 - 20%

Electricity

0 - 100%

Wind

1 - 32%

Solar

0 - 12%

Nuclear

0 - 100%

Source: International Transport Forum (2018). Decarbonizing maritime transport, Paris: OECD, Table 4, page 32.

Table 1.

February 2019 — BC Shipping News — 31

SHIPPING EMISSIONS

NYK Line’s Auto-Eco, launched in 2016, highlights the industry’s move toward LNG-fuelled vessels.

...the industry really needs to think about which segments of the market are most likely to adopt what kinds of fuel for propulsion, executing a multi-platform strategy as the best way forward. take advantage of the opportunity available from the IMO 2020 sulphur emissions cap as it already has refining capacities that can produce near zero-sulphur fuel.

The second speaker, Bill Hutchins, Project Manager LNG Marine Fuels – Americas for Shell, focused on the role of LNG as a stepping stone in getting to the zero emissions target. While he believes that hydrogen will be the successful fuel alternative to heavy fuel oil in the long term, the next 20-30 years will need a transition fuel and that will be LNG. Shell has invested in seven LNG bunkering vessels already and is looking to grow this opportunity in the short and medium term. On a very positive note, he spoke of the refining industry’s efforts to standardize LNG bunkering connections globally as part of the smoothing of the adoption process.

The third speaker, Ned Moran of Moran Towing Corporation, injected into the discussion the very practical challenges faced by ship owners as they move towards LNG adoption. He noted that a number of operators in U.S. ports already use LNG, and its use is even greater in North Europe. However, he identified six reasons why LNG is a difficult choice for marine 32 — BC Shipping News — February 2019

operators considering LNG as a marine fuel. First and foremost, his primary concern is that his LNG tugs become unusable if they need to be re-positioned to ports without LNG bunkering capacity, underscoring the ‘chicken and egg’ problem of which comes first, the demand for LNG or the availability (supply). Second, LNG requires four to six times the storage space of conventional fuels, and that storage cannot be located under crew quarters. This impacts vessel design alternatives and, for cargo ships, will alter vessel economics as it reduces cargo carrying capacity. Third, he cautioned that LNG is a low response fuel — you don’t get to ‘full steam ahead’ quickly when you need additional propulsion. Fourth, his company’s experience is that LNG tugs cost 30 per cent more but can work fewer continuous hours than other vessel types. Fifth, for U.S. owner operators, there are crew and build issues in the U.S. under the Jones Act. Finally, the location of the LNG vent mast is critical; it cannot be retracted and, therefore, his LNG tugs face a limited scope of use as they cannot work underneath the extreme fore and aft locations on cruise ships or aircraft carriers.

The final speaker, John Butler of the WSC, was clear that if the industry really wants ‘zero emissions’ shipping, it must find alternatives to fossil fuels. He argued that the limits of conventional technologies have almost been reached. LNG is not really suitable for long distance, transoceanic routes, and, as a fossil fuel, still places the zero emissions target out of reach. He argued that the industry really needs to think about which segments of the market are most likely to adopt what kinds of fuel for propulsion, executing a multi-platform strategy as the best way forward. Because the zero-emissions target will not be reached without a global R&D effort on new propulsion fuels, he concluded that a single country will not make sufficient progress to get the industry to the target and that a multilateral research effort will be needed. He proposed that the IMO would be the best governance body for effective action. Finally, he pointed out that the target will not be reached if there is any delay in the implementation of the current 2020 sulphur cap and called on governments to ensure consistent enforcement of what has already been agreed at the IMO. This requires political will.

Planning the transition period

The question and answer period was most interesting. There was discussion of a number of concepts to help with this transition to new fuel systems, including: • A global effort to report on non-availability of compliant fuel by port;

SHIPPING EMISSIONS • Reporting and enforcement via port state control on individual companies found using non-compliant fuel; • A CO2 incentive program be developed with funding aimed at R&D; and • The use of drones to test emissions from vessels in ports.

Furthermore, there was also discussion about how to handle those vessels not using closed loop scrubbers, because open loop ones just change the problem to one of ocean acidification resulting from sulphur-infused water dumped into the ocean. This means ports will need to offer facilities at berth to remove the sulphur wastewater as they currently do for ballast wastewater. Perhaps, it was suggested, that the list above should also include a reporting system for ports not having sulphur waste handling facilities.

Finally, when the panelists were pushed to identify the biggest challenge to achieving the target of zero emissions, the consensus was education, particularly on the use of LNG as a marine fuel in the transition period. It is not just a question of educating those in the shipping industry who have to make vessel investment decisions, but one of educating regulators on new responsibilities and reporting systems, and citizens in port communities who somehow think just leaving fossil fuels in the ground now is an appropriate response.

engines and hull designs have already been exploited and more is not likely to be achieved here. One alternative he proposed to reduce emissions in the shorter term is further reductions in vessel speed of one to two additional knots from the current 12 knots. (Long gone are the days of 20-knot steaming, and there is, according to UNCTAD’s Review of Maritime Transport, a permanent reduction in vessel steaming speeds already.) This approach was contentious with an audience cognizant of the inventory carrying costs cargo owners face with slower steaming.

There was considerable rumination about whether the world should prepare to reshore production closer to consumption or impose carbon pricing so that transport prices reflect the true cost of air emissions or both.

Meanwhile, Maersk announced that it will use compliant fuel by 2020 and work hard to identify alternative fuels for the industry. On December 4, the company raised the bar by promising to meet a zero carbon emissions target by 2050.

Maersk appears to be seizing the mantle of

leadership amongst ship owners, but surely this has got to be the plan for all.

The Marine Board discussion explored the ‘moon shot’ for this wicked challenge: researchers in all fields need to think about what can be done on a multi-lateral, networked level, who will undertake the work, and how the public and private sectors can work together. This is not a one-country challenge — there is a national interest faced by all countries and those in the private sector in each country need to be involved so that there is a positive outcome for all. It is time for Canada’s research community, and all in the ocean shipping industry, to support the needed research and development in this field.

Dr. Mary R. Brooks is Professor Emerita at Dalhousie University’s Rowe School of Business. In 2016-2018, she served as Chair of the Marine Board of the U.S. National Academies. She recently chaired the Council of Canadian Academies’ assessment of The Value of Commercial Marine Shipping to Canada. She is a co-winner of the 2018 Onassis Prize in Shipping.

What will be the most likely ship fuel in the longer term?

In the final analysis, there seemed to be agreement that LNG is a marine fuel for the next 20 to 30 years while R&D happens on alternative energy sources for propulsion in the longer term. Here, there was no consensus as some panelists believed that hydrogen was the most likely energy source, while others had greater faith in the development of fuel cells and new battery technologies.

What was clear to those attending is that neither hydrogen nor fuel cells or batteries will be medium-term solutions, and that more market-ready solutions like LNG are the intermediate step.

In a recent presentation at the Federation of European Private Port Companies and Terminals Annual Stakeholders Conference in Brussels, Martin Stopford, CEO of Clarkson Research, argued cogently in favour of hydrogen as the best marine fuel in the long term. He noted that the efforts towards more efficient diesel February 2019 — BC Shipping News — 33

CARGO LOGISTICS Nanaimo’s BC Vehicle Processing Centre

Setting the service bar high

By Laurie Jones

A

s 2019 began, the bustling Port of Nanaimo saw the arrival of the first of many shipments of Europeanmade vehicles that will be handled through the 60,000-square-foot BC Vehicle Processing Centre (BCVPC), with distribution to dealerships on Vancouver Island and to Vancouver for dispersal throughout Western Canada.

“Including the first ship that will be arriving in February, we are expecting to receive 400 to 500 vehicles per shipment, twice per month, over the course of the first year,” said Ian Marr, CEO for the Nanaimo Port Authority (NPA). He added that the ships will dock at the updated B/C berth at the Nanaimo Assembly Wharf, with new bollards to safely accommodate the larger Pure Car and Truck Carrier (PCTC).

The dolphins provide additional anchoring stability at the north and south end of the existing wharf. “These ships have a bigger profile than the regular vessels that come to Nanaimo.”

The $19-million project was a joint effort between the NPA, Western Stevedoring and the National Trade Corridor Fund (NTCF) with Ottawa contributing up to $6.3 million. During its development, Transport Minister Marc Garneau was quoted as saying, “How efficiently we move goods plays a critical role in the health of our economy and so this program, called the National Trade Corridors Fund, is a fund of $2

“The BCVPC will be an ongoing economic driver for Nanaimo, employing up to 60 people from the city and creating work for longshore teams, trucking and barge companies...” billion and we’re allocating that to different projects that remove bottlenecks and make our transportation system more efficient.”

Prior to the BC Vehicle Processing Centre coming to fruition, the European vehicles were shipped to Halifax where they were prepared for the Canadian market, then sent by rail or truck across Canada. Now, the ships will traverse the Panama Canal on their way to Nanaimo.

“The BCVPC will be an ongoing economic driver for Nanaimo, employing up to 60 people from the city and creating work for longshore teams, trucking and barge companies,” said Marr, adding that Western Stevedoring will continue to operate the facility while the cars will be driven off the ship and coordinated for distribution by the BCVPC staff.

The BCVPC building was set up in one of two existing warehouses on 17 acres of NPA property at the Nanaimo Assembly Wharf. “The structure was repurposed and improved, with new cladding and many other enhancements added,” Marr explained. “The overall allocated space will not only allow for the operation of the business, but also the movement and parking

of hundreds of vehicles in transit. If the BCVPC business grows, we have other options for expansion.”

Another reason Nanaimo was chosen as the Vehicle Processing Centre was its direct, short-sea connection to the Lower Mainland. “There are significant capacity constraints, among other issues, for European Automotive Original Equipment Manufacturers,” said Marr. “With this project, the Nanaimo Port Authority will now be able to utilize their facilities for a new industry and also be an economic driver for business activity on Vancouver Island.”

Marr expressed confidence that, as news of the NPA’s most recent initiative spreads, there will be increased interest in the facilities offered in Nanaimo. “People will be able to see that we are a short distance from Vancouver and able to move products to the Mainland easily. We have definitely had more business inquiries, which is really good.”

In a previous statement, Port of Nanaimo Chair Michelle Corfield said, “This exciting project is the result of a lot of discussions and hard work that is going to result in economic stimulus for Nanaimo. Projects like

The BC Vehicle Processing Centre highlights a growing diversity in industry for the Port of Nanaimo.

34 — BC Shipping News — February 2019

Photo courtesy the Port of Nanaimo

CARGO LOGISTICS Photo courtesy the Port of Nanaimo

this don’t happen overnight and we are grateful for the persistence and vision demonstrated by our Port team and our new tenants.”

Ryan McGillis, BCVPC Manager, is looking forward to bringing this opportunity to Vancouver Island. “This new service is exciting for everybody involved in the retail automotive industry in Western Canada. Our goal is to be the highest quality provider to both dealers and manufacturers. We want to set the standard for processing vehicles.”

Dave Lucas, Senior Vice President, Western Stevedoring, said, “The auto companies will benefit from an efficient supply chain, avoiding the bottlenecks of Greater Vancouver. Vancouver Island will benefit with the creation of good jobs and economic activity.” He added that Western Stevedoring is eager to see greater industry diversification in Nanaimo. “Our company was founded on Vancouver Island in 1948 and we are very excited to be expanding our business on the Island by bringing this auto operation to Nanaimo.”

Prior to the first ship’s arrival, Marr noted one of the NPA staff members travelled with BCVPC staff to Long Beach, California, to observe similar operations. “They moved 1,600 cars in three hours prior to the next stage of processing and distribution,” he said.

Chief Operating Officer for the Port, Mike Davidson, further observed that the Cruise Ship Welcome Centre — a state-of-the-art passenger terminal opened in May 2011 — was the first project to initiate light industrial use for the Nanaimo Assembly Wharf. The cruise dock is not used for cargo although it has been utilized to moor barges on occasion and for specialized work on specific BC Ferries vessels. “The advancement of the BCVPC provides another

Enhancements to Nanaimo Assembly Wharf’s berths to accommodate the larger ships that will be servicing the new Centre. completed stage for advantages provided by this location,” he said.

“The right type of project that fits all the parameters takes time to identify, to negotiate with partners, to gain community support and various levels of required funding, all with an objective to provide long-term economic stimulus for the region.”

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www.npa.ca February 2019 — BC Shipping News — 35

PORTS & TERMINALS Port of Hamilton

A story of sustainability and growth

By Captain Georges LaRoche LRM Consulting LLC

I

n these times of competitiveness, rising logistic and environmental challenges, along with an uncertain political climate, all being faced by the maritime and port industries, a story of success such as the Port of Hamilton, Ontario, has experienced recently is an inspiration to us all.

In this article we spotlight the port’s cargo logistics and infrastructure renewal, along with the efforts of the Hamilton Port Authority to improve both commerce and the environment. It should be noted that several industries around the Port have experienced notable growth and change as well. We will provide a picture that will interest you and possibly provide some ideas for other ports facing similar challenges. It is imperative to sustainability that we look at the North American maritime industry not only as separate regions, but also as a single industry spanning the entire continent. Further increased communication and cooperation between the various coasts and regions in North America will only prove to increase growth and stability into this century.

The bulk, breakbulk and other cargoes, while not exhibiting any large growth, have adapted, managing to weather the steel mill restructuring, economic and political climates, and still remain solid. Liquid cargoes have recently seen a pleasant increase in volume, from 222,628 mt YTD in Nov 2017, to 306,382 mt YTD in November 2018.

Fertilizer tonnages handled through the Port of Hamilton are up 21 per cent yearover-year 2018 vs 2017.

The port companies also include the establishment of three grain elevators in the Eastport area. Built, owned and operated by: • Richardson International Ltd (completed 1998).

• Parrish and Heimbecker Ltd (completed 2011), a new flour mill integrated with its grain export terminal at the Port.

36 — BC Shipping News — February 2019

It is imperative to sustainability that we look at the North American maritime industry not only as separate regions, but also just as importantly as a single industry spanning the entire continent.

This is the first new-build flour mill built in Ontario in 75 years.

• G3 Canada Ltd (completed 2017).

• As of November 2018, just over 2.4 million metric tonnes (MT) of grain had been handled through the Port, compared to 1.3 million MT by the same time in 2017 — a monstrous 79 per cent increase. The establishment of Hamilton as a viable export port for Ontario Grain products launched the Port into a new venture that has proven quite successful to date.

With the three elevators in operation, agricultural cargo grew as a proportion of the port’s total tonnage, from nine per cent (815,000MT) in 2008, to 20 per cent (two million MT) in 2014, and by November 2018, 29 per cent. There was one month remaining in soybean season when the

November numbers were released so expect the grain number to climb even further.

Grain volumes are always dependent on several commodity factors such as good/bad crop years in Ontario, and price/demand factors in the market. There are, however, a few additional factors that have made 2018 interesting: • The new CETA has come into effect, creating more opportunities for Canadian agricultural products to access European markets; • A recent drought in Europe resulted in a poor domestic corn crop, increasing the need for foreign feed.

• Counter tariffs on agricultural products (responding to U.S. steel and aluminum tariffs) have resulted in foreign markets sourcing more grain products outside of the U.S.

The Port of Hamilton has been seeing notable success recently.

PORTS &TERMINALS With the addition of the three grain elevators, the Port of Hamilton now has more than sufficient capability to handle present and future grain surges with efficiency and ample storage capacity. Funding now being provided through the National Trade Corridor Fund will further enhance storage capacity and infrastructure renewal.

The Port of Hamilton is located in Hamilton, Ontario {population 536,917 (2016 c)}, at the far western end of Lake Ontario. Hamilton (named for George Hamilton, a Canadian merchant and politician) was incorporated as a city in 1846. With its large, deep harbour and the 1854 establishment of the Great Western Railway, Hamilton was fittingly situated to become an industrial hub. Railway expansion across Canada was pushing the need for steel and Hamilton’s economy began to surge. The Sherman Brothers (Frank and Clifton) founded Dominion Foundries and Steel (Dofasco, now ArcelorMittal Dofasco) in 1912, creating the second of two titans that would bring prosperity, visibility and employment to the city. The first, the Steel Company of Canada (Stelco) was established in 1910. It was founded after the merging of several smaller companies.

The Port of Hamilton is linked to two major Great Lakes shipping routes — the Burlington Canal Piers being approximately 26 nautical miles from the Lake Ontario Welland Canal entrance; and 159 nautical miles across Lake Ontario to the entrance of the St. Lawrence River. With several Seaway-depth berths, the Port can enable marine cargo movements throughout the Great Lakes and overseas. A 2010 study by Martin and Associates stated that cargo passing through the Port of Hamilton was connected to $6 billion in economic activity and 38,000 jobs in the province of Ontario.

Since the Steel companys’ formation, several industries have established strong footprints, showing solid sustainability and even expansion. McAsphalt, Lafarge Canada, and Heddle Marine Service Inc. (ship repair/building), amongst others are a large part of the Port’s advancement and contribute significantly to the local economy. The Port houses multiple terminal operations, providing storage and transloading of dry and liquid bulk commodities, breakbulk and project cargo. The Port is served by two stevedores: Federal Marine Terminals and Great Lakes Stevedoring,

A 2010 study by Martin and Associates stated that cargo passing through the Port of Hamilton was connected to $6 billion in economic activity and 38,000 jobs in the province of Ontario. and by two Class-1 North American railways: CN and CP.

The Hamilton Port Authority

Another large reason for the port’s achievements has been the establishment and ensuing work of the Hamilton Port Authority.

The HPA was created in 2001, replacing the Hamilton Harbour Commission, which had been in operation since its inception in 1912. At present, more than 620 acres of land is owned by the HPA, primarily related to logistics and transportation of cargo and goods for key local industries.

Since its creation, the Port Authority, along with the Hamilton Harbour Commission before it, has not only worked diligently to expand and evolve the commerce in the port, but also have dedicated substantial time and money to restoring and protecting the local environment and heritage. “Southern Ontario is still Canada’s industrial heartland. While the economy continues to evolve, there remains a need for industrial capacity, and the ability to facilitate trade for key industries like manufacturing, construction and agriculture,” said Ian Hamilton, HPA’s President and CEO. “I think our secret has been to develop infrastructure that is flexible enough to allow us to respond to opportunities when they arise.”

In 2017, Ian Hamilton succeeded Bruce Wood, who had led the organization since 2008. He assumed this role in January 2017 after serving as the Port’s Vice President of Business Development and Real Estate since 2008. Mr. Hamilton has been instrumental to the Port’s success in attracting more than $300 million in external investment.

In November 2018, Transport Minister Marc Garneau visited Hamilton to announce an investment of $17.7 million in the Port from the National Trade Corridors Fund (NTCF). The federal investment will be matched by the HPA in support of the port’s $35.45-million Westport Modernization Project. This project will see port lands used more efficiently and be upgraded to create new employment and land development parcels.

New marine, rail and truck transportation infrastructure will improve efficiency and fluidity for port users. Perimeter areas will add landscaping to improve the port-city interface.

HPA’s plan for Westport is to create a multi-modal transportation hub. They expect to leverage today’s investments into $80-90 million in new business. Westport is a 115-hectare area located at the west end of the Port of Hamilton. The plan will include upgrades and developments to four major components of the port:

February 2019 — BC Shipping News — 37

PORTS &TERMINALS When asked to describe the future of Hamilton Port in three years, Mr. Hamilton was quick to describe a diverse array of opportunities available.

Ian Hamilton, CEO and President, Hamilton Port Authority.

1. Marine infrastructure 2. Rail infrastructure 3. Roadways & utilities 4. Storage capacity They have also dedicated significant monies to the continued efforts of the organization to renew and preserve the marine environment in Hamilton.

Hamilton Harbour is home to the largest and most contaminated site within the Canadian side of the Great Lakes — Randle Reef. Located in the southwest corner of Hamilton Harbour, Randle Reef site is about 60 hectares (or about 120 football fields) in size. The site contains approximately 695,000 cubic metres of sediment contaminated with polycyclic aromatic hydrocarbons (PAHs) and other toxic chemicals.

In 2012, it was announced that the port and federal government would dedicate $138.9 million to the Randle Reef Contaminated Sediment Remediation Project. The project will involve the remediation of approximately 695,000 m3 of contaminated sediments in Hamilton Harbour.

Cleaning up Randle Reef is one of the most significant steps remaining to remediate Hamilton Harbour. The project will reduce the amount and spread of contaminants through the Harbour, significantly improving water quality and fish and wildlife habitat. The Harbour will also experience economic and social benefits: enhancement of shipping and port facilities, increased recreational opportunities and the promotion of the Harbour community as a clean and progressive place to live and work.

38 — BC Shipping News — February 2019

The industries around the Port of Hamilton now face the same challenge that is being felt throughout the maritime and port industries worldwide — the recruitment of a new young skilled workforce to replace retirees. Skilled welders, mechanics, crane operators, etc., are becoming more difficult to find and hire. The HPA has entered into a program with Mohawk College, a local educational institution, to help connect students with employment in the transportation sector and to help bridge the skills gap. Through this Supply Chain Management Program, the Port works with port-located companies to help create co-op and internship placements that complement students’ studies. They have also set up a $20,000-tuition support fund to assist local students enrolled in the program.

In another initiative, the Cityschool Program, HPA works closely with CitySchool

by Mohawk to create a pathway to jobs in the skilled trades. Backed by a $10,000 HPA contribution to CitySchool’s mobile classroom, CitySchool now offers a free, on-site introduction to welding, an in-demand skill amongst Hamilton’s industrial employers.

The future

With the three elevators now able to export the majority of Ontario wheat and grains, along with road and rail upgrades, the export figures should maintain and undoubtedly grow. Crop size, global demand and ongoing tariff situations will affect the figures.

Import of urea and other fertilizer cargoes have increased in volume in 2018.

Hamilton’s two fertilizer terminals, operated by Agrico and Sylvite, are positioned to handle the rising imports of fertilizer cargoes, facilitating supply to farmers throughout Ontario and possibly further into the Great Lakes Region.

Many ongoing factors will affect the steel industry, making any predictions at this time rather difficult.

Federal Marine Terminals, Lafarge Canada, and great Lakes Stevedoring continue to adapt to the changing demands and are handling several new cargoes as well as the standard bulk entities such as

salt, aggregates and gypsum. Infrastructure throughout North America is undergoing major renewal, further increasing the demand for cement, stone, steel, etc. This factor should support the bulk industry and provide a convenient gateway that should attract further cargoes in the future.

When asked to describe the future of Hamilton Port in three years, Mr. Hamilton was quick to describe a diverse array of opportunities available. ““From a cargo perspective, we see more opportunity in liquid bulk, particularly in helping to serve an undersupplied road fuel market in southern Ontario,” he said. “We’d also like to work with our container shipping partners to explore opportunities for containerized shipping of specialty agricultural commodities like perhaps beans and pulses and we’d like to build on our success in primary agricultural commodities like grain to attract more secondary processing. The new Parrish & Heimbecker flour mill that recently opened is a good example of how it can make sense to build on the supply chain right here at the port.”

Mr. Hamilton went on to say that, from a strategic perspective, “we are starting to take a more regional view of the market we serve. We’re looking beyond the port’s existing footprint into Niagara for example to offer the transportation services our regional economy needs. This means building a network of marine assets in southern Ontario so we have space for industry to grow and so Ontario industry is able to take full advantage of this environmentally friendly and cost competitive mode of transportation.”

In summary, the Port Authority and industries around the Port have provided a business model that has proved to be progressive and effective. Being able to veer from the course traditionally followed frequently brings new discoveries.

Captain LaRoche is a professional mariner with over 30 years’ experience sailing the Great Lakes and internationally for Canada Steamship Lines and Upper Lakes Shipping.

He now works as a Marine Transportation and Cargo Consultant based in Ottawa, Ontario.

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AIDS TO NAVIGATION Canadian Hydrographic Service

Enabling Canada’s economy through safe and efficient navigation David Prince, Director CHS Pacific Region

T

he products and services of the Canadian Hydrographic Service (CHS) are used continuously by all mariners throughout Canada to aid navigation. Whether it’s a chart, Sailing Directions or Tides and Currents Tables, these essential products are the output of the dedicated professionals who work for CHS. Founded out of the tragic loss of the SS Asia in Georgian Bay in 1882, the Government of Canada took over the responsibility of surveying and charting Canadian waters from the British Royal Navy. The first Canadian surveys on the West Coast occurred in Burrard Inlet in 1891, with a permanent Pacific office being established in 1907 in Victoria, to manage West Coast operations. Today’s CHS is part of Fisheries and Oceans Canada’s Oceans and Ecosystems Science Sector and is located at the Institute of Ocean Sciences in Sidney, B.C. CHS focuses on three areas: 1) collecting highly accurate bathymetric data and tidal measurements; 2) management of data to make it accessible for many other purposes in addition to navigational products; and 3) production and publication of products and services to aid safe and efficient navigation.

Hydrographic surveys are conducted by a variety of means. CHS utilizes the Canadian Coast Guard ships which are equipped with multi-beam echo sounders that provide complete bottom coverage when gathering depth data. Similar technology is employed on smaller CHS vessels which are used for near shore surveys. CHS also utilizes the private sector to conduct LIDAR (Light Detection and Ranging) surveys from airplanes. This technique can measure depths of water up to 30 metres in ideal conditions, and can cover large areas of shallow water very quickly.

An important component of surveying is the measurement of tides. As the water levels are always changing, it is essential to correct 40 — BC Shipping News — February 2019

As the water levels are always changing, it is essential to correct survey data by reducing the depths collected by removing the tide component from the survey data, so that the chart can be referenced to a common low water datum. survey data by reducing the depths collected by removing the tide component from the survey data, so that the chart can be referenced to a common low water datum. From there, the mariner will apply the tide level to derive the actual available depth at any given time. This is extremely important in areas where there is a low under keel clearance or where vertical clearance is tight.

The ability to maximize the underwater and vertical clearance can be critical to a port in determining the maximum size vessels that can be accommodated. To measure the tides, CHS has a network of 16 permanent tide gauges around the province and establishes additional gauges in areas where surveys are being conducted.

These tidal measurements are critical for developing long-term observations which are used to develop annual Tide and Current Tables. CHS now has tidal data streamed via AIS directly to users, so the mariner has accurate, real-time data in addition to predictions.

The products the mariners are most familiar with are the CHS charts. Traditionally, these have always been available in a paper format but over the past couple of decades, navigation charts have also be produced in two digital forms, an Electronic Navigational Chart (ENC) in the vector based S-57 format to be used in conjunction with an Electronic Chart Display Information System (ECDIS), or a rasterbased BSB type used in an Electronic Chart System commonly used by recreational boaters. All of these chart formats are based on the same source data and produced within a

Hydrographic Production Database system.

This database allows for the incorporation of updates issued as Notice to Mariners to ensure chart information is current.

Over the past few years, CHS has also developed highly detailed, large-scale ENCs at the request of clients in specific ports where situational awareness is critical.

Working closely with clients, CHS has compiled these products to ensure the required level of detail is shown to aid critical navigation decisions during docking and undocking evolutions.

What navigators have come to rely upon is the high quality of CHS products and services. As CHS products are a mandatory carriage requirement under the Charts and Nautical Publications Regulations of the Canada Shipping Act, there is an inherent

AIDS TO NAVIGATION duty to ensure they are as accurate as possible. CHS has always employed a quality control system to ensure the highest quality, but this system was formalized in 2001 when CHS became International Standards Organization (ISO) certified.

CHS currently is certified to the ISO 9001:2015 standard and follows a set of quality management principles. These principles ensure we: are responsive to clients; consistently deliver valued products and services; analyze and make decisions based on risk management; achieve continuous improvement through innovation and adoption of best practices; and have

an organizational commitment to have a rewarding and healthy workplace. These principles allow CHS to achieve its mission to provide up-to-date, authoritative and standardized hydrospatial information.

As mariners navigate around the world, it is important to have standards for the products they use for navigation. CHS represents Canada within the International Hydrographic Organization, a body that brings together maritime nations to standardize its products and services. This intergovernmental consultative and technical organization, established in 1921, supports safety of navigation and the protection

of the marine environment. CHS leads and participates in all the major technical committees and working groups to ensure Canada is well positioned with advancing technology.

Hydrography is a science which is continually advancing. New technological developments drive the industry, in terms of how CHS collects information, supplies data and how mariners use these products and services to navigate safely. In addition to the latest LIDAR technology CHS uses, we are advancing the field of Satellite Derived Bathymetry, using spectral imagery to determine coastline changes and

February 2019 — BC Shipping News — 41

AIDS TO NAVIGATION

CHS staff conduct a tidal survey at Luke Passage.

Staff review a new chart. detect shoal areas. This is especially useful in areas of continual change, or in frontier areas that have not been surveyed in detail, allowing for effective planning to conduct safe surveys.

Another source of information that CHS is gathering is Crowd Source Bathymetric data. This is the collection of depth measurements from vessels, using standard navigation instruments such as an onboard echo sounder while engaged in routine maritime operations. CHS has limited ability to gather data itself, so utilizing data gathered by others, applying quality control and verifying repeatability, all add to the confidence in the data to help fill in gaps in bathymetric coverage. Though in its infancy, the potential data stream is enormous. This presents challenges in managing the data, but also presents possibilities in acquiring data in areas we may not be able to get to.

42 — BC Shipping News — February 2019

The next advancement in products for mariners will be the new S-100 framework of digital products. This will replace the existing S-57 vector-based chart products with a new series of products based on a transfer standard and multiple product specifications. This standard will allow integration of many useful data layers, such as high definition bathymetric surfaces, water level information, surface currents, maritime limits and boundaries and marine protected areas to name just a few. These combined with other sources of information will allow the user to have a comprehensive e-Navigation solution.

With Canada having the longest coastline in the world, the Government of Canada recognizes the importance of Canada’s oceans. The Oceans Protection Plan (OPP) announced in November 2016 aims to improve marine safety and responsible

shipping, provide for the protection of Canada’s marine environment and offer new possibilities for Indigenous and coastal communities. Towards this goal, the CHS is receiving in excess of $110 million over a five-year period to address specific issues.

The Oceans Protection Plan is an advancement of our core program to deliver better information to mariners. There are four pillars that CHS is addressing within OPP. The first is to conduct modern surveys and produce ENCs in 23 highest priority ports. This involves CHS conducting multibeam surveys to today’s standards of accuracy and incorporating this data into chart products. Of these 23 ports identified nationally, 13 of them fall within B.C. The second project requires CHS to conduct high resolution nearshore surveys in high-priority areas. Most areas of B.C. are surveyed and charted to some degree, but certain sensitive areas are poorly charted. A focus within B.C. will be Haida Gwaii and areas of the north coast.

The third pillar will be to deliver dynamic products and services. There are three components to this, the first being modernization and standardization of the tide gauge network. The second piece is the nationalized operationalization of both observational data and ocean-model forecast delivery systems (real time and forecast tides). The final piece is developing a continuous vertical datum model to more efficiently collect and manage bathymetry.

The fourth and final pillar is surveying and charting in the Arctic. Utilizing Coast Guard icebreakers and capacity within the private sector, CHS will increase its modern hydrography in key areas. This data will aid the increasing vessel traffic that navigates in the Canadian Arctic.

Though the Canadian Hydrographic Service has been surveying and charting Canadian waters for 137 years, there is still much to do. Mariners who now navigate with GPS have the ability to position themselves more accurately than the surveys that were conducted before the advent of GPS. With the need for highly accurate, high definition, real-time data, CHS is improving the products and services we supply.

The use of new technology and evolving product lines will well position CHS to meet the future needs of mariners. By providing products and services which aid safe and efficient navigation, CHS is enabling Canada’s economy.

Council of Marine Carriers

The voice of Western Canadian tug and barge operators.

Evolution of the Industry

23RD B.C. TOWBOAT INDUSTRY CONFERENCE & CMC GOLF TOURNAMENT May 2 to 4, 2019

The Fairmont Empress Hotel Victoria, B.C.

Visit the CMC website for further information: www.comc.cc Email: cmc@comc.cc / Phone: (604) 687-9677 February 2019 — BC Shipping News — 43

LEGAL AFFAIRS

Recent changes to the Canada Shipping Act and the Marine Liability Act

By Elyn Underhill, Associate Counsel with Bernard LLP

B

ill C-86 entitled “A second Act to implement certain provisions of the budget tabled in Parliament on February 27, 2018 and other measures” (or “Budget Implementation Act, 2018, No. 2” for short) was given royal assent on December 13, 2018. The bill was first introduced in parliament by the Minister of Finance on October 29, 2018.

It was an omnibus bill which included many budget-related legislative amendments and some significant amendments to the Canada Shipping Act (CSA) and the Marine Liability Act (MLA) and other acts. The bill was long (about 850 pages in length) and was described as “clownish” in size by the NDP when the House of Commons Speaker was asked to split up the bill for the purpose of voting on it.

That request was refused and as a budgetary bill it moved through the legislative process quickly.

Significant changes have been made to the CSA and the MLA. The October 30, 2018 press release issued by the federal government regarding the legislative changes

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44 — BC Shipping News — February 2019

Penalties for breach of these regulations could be significant: a fine of not more than $1,000,000 or imprisonment for a term of not more than 18 months, or both. states: “These changes deliver on commitments made under the Oceans Protection Plan to enable the government to respond to marine pollution incidents faster and more effectively, and to better protect marine ecosystems and habitats.” The amendments are to improve marine safety and environmental protection by: • Modernizing Canada’s Ship-source Oil Pollution Fund, including unlimited compensation for victims and responders in the event of an oil spill from a ship; • Strengthening the legal authority to regulate marine vessels in order to protect the marine environment including, for example, to protect endangered whale populations; • Authorizing the Minister of Transport to issue interim orders to allow for immediate actions to be taken to address

a pressing risk to marine safety or to the marine environment; • Enabling more proactive, rapid, and effective response to oil spills in Canada’s waters, while maintaining the polluter pays principle; and • Supporting research and innovation to enhance marine safety and environmental protection.

It seems rather curious that these important changes were buried in the 850 pages of the omnibus budget bill.

Section 10(1)(c) of the CSA has been amended to allow the Minister of Transport or the Minister of Fisheries and Oceans, with respect to the Ministers’ responsibilities under the CSA, to enter into agreements or arrangements respecting the administration or enforcement of any provision of the CSA or its regulations; and it authorizes any person with whom an agreement or arrangement is entered into to exercise the powers or perform the duties under the CSA that are specified in the agreement or arrangement. It is not clear which Ministers’ responsibilities are intended to be delegated. The press release does not provide any details. The delegation of responsibility to the provinces or other groups raises some concerns. To how many bodies will these responsibilities be delegated and how can we be sure that the administration and enforcement of the Act will be exercised in a consistent manner across the country?

Do these groups have the knowledge, skill and expertise required to fulfil what could be a very complicated mandate? It is anticipated that constitutional challenges may be raised as a result of this delegation of responsibility.

LEGAL AFFAIRS The Minister of Transport now has the power under section 10 (2.1) of the CSA to exempt a person or vessel from the application of any provision of the Act or regulations if the exemption would allow the undertaking of research and development in respect of any type of vessel, technology system, component, procedure or practice that may enhance marine safety or environmental protection.

Section 10.1 is added to the CSA to allow for interim orders. Under this provision the Minister of Transport may make an interim order (i.e., an order that could be contained in a regulation under the CSA) if he or she believes that immediate action is required to deal with a direct risk to marine safety or to the marine environment. The section does not provide any guidance on when such an interim order should be made.

The CSA is amended by the addition of section 35.1 which provides authority for the creation of regulations respecting the protection of the marine environment from the impacts of navigation and shipping activities including regulations respecting the design, construction, and manufacture of vessels and their machinery and equipment; the machinery and equipment required on a vessel; certificate requirements; compulsory routes and recommended routes; the operation, navigation and anchoring of vessels; and the loading or unloading of vessels.

Presumably these regulatory powers will be used to prohibit the loading and unloading of certain commodities. Penalties for breach of these regulations could be significant: a fine of not more than $1,000,000 or imprisonment for a term of not more than 18 months, or both.

The amendments to sections 168.3, 175(2) and 180(1) of the CSA will allow the Ministers/pollution response officers to act proactively where a party “may” rather than “is likely to” discharge oil. The wording will substantially increase the ability of Ministers’/oil pollution officers’ power to intervene. The use of the word “may” will no doubt lead to litigation. Query: Is a 10 per cent chance or less something that “may” happen?

Section 180(2) now provides that where the Minister of Fisheries and Oceans takes measures to repair, remedy, minimize or prevent pollution damage from a vessel by selling the vessel or its contents, the Minister may give the person acquiring them valid title to the vessel or its contents

free from any mortgage or other right that is in existence at the time of the disposition. It is unclear how this provision will work in practice as normally a buyer of a vessel in circumstances where there are claims to the vessel by parties other than the owner of the vessel, will be looking for a court order conveying clear title to the buyer.

Section 101(1) of the MLA is amended.

It extends the liability of the Ship-source Oil Pollution Fund to include “economic loss caused by oil pollution suffered by persons whose property has not been polluted.”

Allowing recovery for economic loss will increase the exposure of the fund, the cost of which will ultimately be borne by the shippers, receivers and carriers who capitalize the fund.

The MLA has been amended to provide for an expedited process for small claims against the Ship-source Oil Pollution Fund.

The small claims limit is $35,000 or other amount set by regulation or in the case of a “significant incident” is $50,000 or other amount set by regulation and does not include claims for economic loss. The claim is to be assessed within 60 days by the Administrator of the Ship-source Oil Pollution Fund and the Administrator has the power to investigate and reassess the claim within three years of the occurrence which gave rise to the claim.

The limit of liability per occurrence of the Ship-source Oil Pollution Fund has now been removed and section 110 provides for emergency funding. Where emergency funds are necessary to respond to an incident, the amendments provide for the direction of funds (to a maximum of $50 million per fiscal year) to the charge of the Ship-source Oil Pollution Fund. This additional funding would be temporary in nature and would be repaid through a supplementary levy borne by oil receivers and exporters.

Note that some of the amendments to the MLA come into force on a day to be fixed by order of the Governor in Council. It will be interesting to see what the effect of these potentially significant changes to the CSA and MLA will be, especially considering that the amendments were part of an omnibus bill where there was limited opportunity for input from interested parties.

Elyn Underhill is a lawyer with Bernard LLP and can be reached at Underhill@ Bernardllp.ca.

February 2019 — BC Shipping News — 45

FINANCE

Protecting your company from payment fraud (Part I)

By Andrew Kostiw, Director Treasury Management, TD Bank

A

s a follow-up to my last article (BC Shipping News May 2018), I thought it might be helpful to dive deeper into actual tools that companies are using to help mitigate payment fraud. In the May article, it was mentioned that cheques continue to be the primary target for fraud attempts. This continues to be true. In this first article on techniques used by companies, I explore how companies are protecting themselves when paying with cheques.

Quite simply put, cheques provide a lot of information that fraudsters can use to their advantage. Company name, address and, most useful of all, the company’s bank account number, can all be obtained from a cheque. However, despite the potential risks with this common form of payment, there are ways companies can protect themselves from cheque fraud.

But before I delve more deeply into the prevention techniques, it’s important to provide a few definitions on the types of cheque fraud.

Common types of cheque fraud

There is not only one way to alter a cheque and change the information on it.

Fraudsters have become sophisticated and have developed elaborate techniques to alter these paper instruments. A variety of

There is not only one way to alter a cheque and change the information on it. Fraudsters have become sophisticated and have developed elaborate techniques... methods are used to commit cheque fraud.

These include: • Counterfeiting: Cheques are either produced fraudulently or a legitimate cheque is duplicated.

• Materially altered cheque (payee or amount): Fraudsters steal cheques and use methods to erase the original payee name/amount and add new information.

• Forged endorsement: Cheques are stolen, endorsed by the fraudster and cashed.

How can companies protect themselves if they must use cheques?

So how can companies protect themselves when using cheques to pay suppliers? One obvious way is to reduce the use of cheques whenever possible by choosing other payment methods such as, electronic funds transfer (EFT), credit card, or online bill payments. But realistically, this is not always possible as many suppliers and payees continue to prefer cheques as a form

Chart 1 — Scenario example of TD’s Cheque Fraud Protection.

46 — BC Shipping News — February 2019

of payment. Thankfully, the amount of cheque usage is on a downward trend. So what can a company do when EFT and online bill payments just don’t fit?

A common tool used by many companies to help protect against cheque fraud these days is a service called Cheque Fraud Protection (CFP). It is confusing sometimes because various banking institutions will name this service slightly differently – the same naming terminology is not always used. Some of the more common names you may come across include: Positive Pay, Enhanced Positive Pay or Positive Pay with Payee match.

Irrespective of the name, the purpose of this service is to provide a way for companies to mitigate fraud associated with cheque payments. Essentially, it is a cheque-matching service that matches cheques issued with a record of cheques on file with the bank, allowing the company, in the case of a mismatch, to make a pay/no pay decision before the cheque gets processed. It essentially provides the company (payer) with one last line

FINANCE of defense against fraud. For example, if a fraudster were to alter a cheque (amount, payee name, cheque number) the system would identify this cheque as not matching the cheques issued by the company, resulting in a mismatch and an Alert Communication is generated to the issuer of the cheque.

How it works

With a Cheque Fraud Protection service, companies can prevent fraudulent payments by quickly identifying, reviewing and acting upon suspicious or unauthorized cheques presented.

So how do companies actually use the service on a day-to-day basis?

In a typical scenario (outlined in Chart 1) a company begins by issuing cheques. The list of these cheques is sent in an electronic data file to the bank. This file is called an Issue File. The Issue File is matched by the company’s bank against all cheques issued by the company — fields that are matched include: Serial Number of Cheque, Amount and Payee Name (i.e., who the cheque is made out to). If there is a discrepancy in any of these elements, an exception alert is created and this is communicated to the company, typically by email. A decision must be then made by the company to pay or not pay the item. This decision, made using an online web portal, needs to be made within a certain timeframe, typically by the end of morning on the day the alert is received. If the company is unable to flag a decision on the cheque in time, the default decision goes into effect. The default decision is usually “do not pay.”

A fraud prevention strategy for any company must include a multi-pronged approach with a collection of services and techniques. a file. (Companies that are unable to create an issue file can subscribe to a CFP service called Negative Pay.) Are there enough people resources in the office to monitor and send files on a daily basis (depending on cheque issue frequency)? What happens when people are away — is there a backup person to monitor?

New cheque stock will need to be ordered / printed as CFP cheques are formatted differently from regular cheques. There is obviously a cost to this.

As a best practice, it is recommended to set the default as “no pay decision” in the event the company is unable to action exception items in time.

The good news is, as a company, you are not alone. Most banks, when implementing this service for their clients, will assign an implementation manager to guide and advise the customer on cheque parameters, data file layout and training of staff. They can also help determine if the service is a right fit.

Conclusion

Cheque Fraud Protection is of course only one method to protect payments. A fraud prevention strategy for any company must include a multi-pronged approach with a collection of services and techniques. Some involve technology solutions while others include daily processes and reconciliation methodologies that need to be common place for any organization. Sadly, there is no simple single solution.

A Cheque Fraud Protection Service, similar to other fraud prevention methods, in itself will not completely eliminate a company’s exposure to fraud. But it will help provide a powerful tool to mitigate the exposure to this highly popular payment scam.

Andrew Kostiw is a Director of Treasury Management at TD Bank in Vancouver.

Andrew has over 20 years of experience working in the banking industry including Commercial Banking and Cash Management.

He can be reached at andrew.kostiw@td.com .

So is Cheque Fraud Protection a right fit for your company?

CFP may not be the best fit for every company. If only a few cheques are issued monthly then it may be more cost effective to simply continue with daily account reconciliation as the relative complexity of setup and per-cheque cost may not make financial sense. As a general rule of thumb, situations will of course vary, companies issuing 30 or more cheques per month may want to explore this service.

Some things to consider when implementing a CFP service

Is the company able to create an Issue File from their Treasury System? Some smaller treasury or accounting systems may not have the ability to create or send February 2019 — BC Shipping News — 47

TECHNOLOGY

PolarConnect brings high-bandwidth data service to the Arctic

By Jeffrey Osborne, VP, Business Development Kepler Communications

C

anada’s Kepler Communications has recently launched a novel solution using nanosatellites that aims to be part of the answer to some of the difficulties faced by vessels navigating the waters of the far North.

When it comes to shipping in the northern hemisphere, the biggest news item for the past decade has been the recession of Arctic sea ice and the expansion of northern routes for commercial shipping. The amount of shipping traffic in the Arctic circle has been steadily increasing over the past few years.

Ice coverage has been retreating as global temperatures have trended higher, allowing ships to skip the long journey south to the Panama or Suez Canals in order to move between North America, Scandinavia, Europe, and Asia. In the past year, large cargo container ships and tankers have, for the first time, successfully navigated the Northwest Passage (above Canada) and the Northern Sea Route (above Europe and Asia) without the assistance of icebreakers.

Many long-range weather models predict that even the Transpolar Sea Route, which passes directly over the north pole, may become a viable route for shipping traffic.

Once considered impassable, these waters are expected to witness increasing levels of traffic over the coming decades.

In August 2017, a specially designed Liquid Natural Gas (LNG) carrier with a hull built for use in icy waters became the first merchant ship to sail across the Arctic Ocean without an accompanying icebreaker, shaving a full week off the time it would have taken to sail the more common route through the Suez Canal and saving up to 1,000 tons of fuel in the process. A costsaving opportunity that makes Arctic shipping even more attractive.

In February 2018, another similarly built ship did the same thing in winter and Maersk became the first shipping company to send a container ship through the 48 — BC Shipping News — February 2019

A new communication service that uses high-bandwidth polarorbiting satellites is set to significantly increase the capability on board vessels...

Northern Sea Route this past August. While commercial traffic in the north varies year to year, influenced by changing ice conditions, economic demand, and industry factors like the price of fuel and the availability of insurance, the overall trend has been upward and is expected to continue to climb.

Just because Arctic shipping is now possible, however, does not mean it is easy.

Arctic weather is unpredictable, the shipping routes aren’t as clearly defined as they are in the south, crews are often challenged by the hazards of the journey, and if something goes wrong, it will happen far away from help. The Arctic hasn’t turned into the South Pacific, nor is it going to.

One of the most significant challenges facing the shipping industry when it comes to navigating extreme latitudes is the lack of services available. Ports are few and far between, support services like icebreaking and tug services face the same environmental and business challenges and haven’t yet grown to match the increase in demand.

Moreover, traditional communications technologies are all but useless because of the geographic remoteness of the Arctic and the challenges of latitude.

The usual go-to for communications technology in remote locations is satellite. All that is required is a clear view of the satellite in the sky. However, because of the curve of the globe, it is problematic to connect to satellites in geostationary orbits (GEO) from Arctic latitudes, because they are all located high above the equator.

There are satellite solutions in place used to provide basic real-time voice and data communications but these lack the bandwidth capacity to transfer large amounts of

data. And substantial amounts of data can be critical when travelling at the Earth’s extremes. Imagine a ship carrying LNG, travelling across the Arctic, hundreds of miles from another ship or port. If something goes wrong, help is not close by.

One of the biggest challenges facing vessels navigating the north is the ambiguity and unpredictability of climate change. The same fluctuating temperatures that have caused the recession of the ice cap, making it possible to navigate the polar region, also bring about unpredictable weather patterns. Highdefinition weather data is crucial to vessel operators at any time and place, but most vessels navigating high latitudes have little or no access to it because of bandwidth limitations in existing communications networks.

To this date, vessel operators in the Arctic rely on low-res ice flow imaging to assess the route conditions, which assists in identifying pressured ice conditions and help to make decisions on the most desirable route. Pressured ice, for example, can threaten ships and leave them stranded, increasing the risk of danger to crew members, cargo and the environment.

A new communication service that uses high-bandwidth polar-orbiting satellites is set to significantly increase the capability on board vessels to safely navigate the Arctic, enabling mariners’ access to high-res ice flow imaging, top-notch weather prediction, and route data to make risk-intelligent decisions, as well as onboard entertainment.

PolarConnect is a data backhaul service provided by Kepler Communications’ nanosatellites. With the first two satellites on orbit and a third launching in the coming months, PolarConnect currently offers a high-throughput store-and-forward

TECHNOLOGY capability in the Arctic. Each satellite is “visible” to a ship for about eight minutes as it travels overhead, long enough to communicate a sizable amount of data (up to 75 GB a day) from the satellite to the ship and vice-versa. As the 140-satellite constellation is built, PolarConnect will offer a highbandwidth and low-latency connectivity service for the Arctic. PolarConnect is fully scalable — service is available right now, and it is backward compatible with most standard Ku-band VSAT antennas.

Kepler’s network makes use of small, lowcost nanosatellites which can be developed and placed into service within 12 months.

The advantage of PolarConnect over traditional GEO satellites is clear — the curvature of the Earth prevents GEO satellites from making line-of-sight contact at latitudes above 70 degrees, which is essential for satellite transmission. The only satellites in polar orbits that provide polar coverage deliver low bandwidth services predominantly for voice applications. Because of this, their per GB costs for data services are exorbitant. Kepler’s solution is proving disruptive in that no other service provider can offer such extensive high-bandwidth coverage in the polar regions at low cost.

Since the very early stages of implementation, Kepler’s PolarConnect service has been delivering services to customers.

One of the first companies to sign on was F. Laeisz, a company that has been operating continuously since 1824. As operators of the Polarstern, a research-focused vessel that often takes large crews into the Arctic for prolonged periods of time, F. Laeisz knows the difficulties that such operations impose on those who undertake them. Access to large amounts of bandwidth is essential to safety, operations, and the comfort of the crew. Above 70 degrees latitude, the Polarstern shut off its VSAT antennas which can no longer operate that far north. Without PolarConnect, the ship would have no way to move valuable highbandwidth data until they returned to port.

Even basic communications would be at a premium, with voice service only, reserved for essential communications. The crew members themselves would be cut off from their outside lives for long periods of time.

While the details, routes and business cases for Arctic shipping are being worked out, there is one thing that we do know — more and more traffic is utilizing the polar region for transport, resource collection,

tourism and science. Before PolarConnect, ships at sea were starving for data. Inevitably, the problem will be solved, likely using a number of different means. PolarConnect, as the first and only service offering high-bandwidth data transmission in the polar regions, is pioneering new technology that connects the globe more completely. We’re sure to hear more about this service in the near future.

Kepler is a satellite telecommunications provider based in Canada, backed by Costanoa Ventures, IA Ventures, and other leading investors. Kepler develops next-generation satellite communication technologies and provides global satellite data backhaul services for wideband and Internet of Things applications with the long-term goal of building a network of satellites to provide inspace connectivity.

Jeffrey Osborne is Kepler Communications’ co-founder and VP of Business Development.

He is responsible for the company’s various market segments and services, including its two initial Satcom offerings for wideband and narrowband communications. Jeffrey’s creative thinking and pragmatic approach to business strategy has helped Kepler secure some of the most important partnerships and early customers.

February 2019 — BC Shipping News — 49

EVENT RECAP

ABCMI Conference attendees offered key intelligence on upcoming opportunities

T

he Association of British Columbia Marine Industries (ABCMI) Business Opportunities Conference in November 2018 started off on a high note and continued to climb throughout the day-long event. Following a major federal funding announcement for the ABCMI, the well-organized agenda led attendees through insights into business opportunities and future fleet plans as well as a primer on understanding the permitting and procurement process and even a look at how marine innovation is playing an integral part in the design of tomorrow’s vessels.

For businesses and suppliers in B.C.’s marine industry, this was a must-attend event. Not only did attendees learn key intelligence on upcoming contracts, they also received advice on how to access these opportunities and, most importantly, were able to network and develop relationships with key company representatives. For those who decided not to attend, the following brief recap should provide encouragement to sign up next time.

Not only did attendees learn key intelligence on upcoming contracts, they also received advice on how to access these opportunities and, most importantly, were able to network and develop relationships with key company representatives.

Keynotes and presentations

Following welcoming remarks from ABCMI Executive Director Alex Rueben and President Tim Page, Minister Carla Qualtrough, (Public Services and Procurement and Accessibility, Government of Canada) announced to an audience of over 200 delegates at the Vancouver Convention Centre a $1-million, three-year funding agreement with the ABCMI that would be used for initiatives aimed at supporting and growing B.C.’s marine trades sector. This including efforts to build a more inclusive industry that engages more women, indigenous peoples and youth. Funds will go toward networking, training, and employment and business opportunities;

exploration and development of labour market solutions under the B.C. government’s sector labour market partnership program; organization of collaborative events with industry, academia, trades training institutions and government; and development of initiatives with industry to organize domestic and foreign trade missions to market the West Coast marine industry to Canada and the rest of the world.

In addition to describing ongoing work to make the procurement process more responsive to the needs of suppliers, Minister Qualtrough also touched on other initiatives the federal government had undertaken — re-opening the Canadian Coast Guard base in Kitsilano;

Over 200 delegates listened attentively to presentations that included key intelligence on upcoming opportunities for B.C.’s marine industry.

50 — BC Shipping News — February 2019

EVENT RECAP upgrades to the Esquimalt Graving Dock (a $175-million investment supporting 1,300 jobs); the Oceans Protection Plan to protect Canada’s marine environment through safe and responsible shipping; and of course, the National Shipbuilding Strategy which is revitalizing industry and providing much needed assets to CCG and the Royal Canadian Navy. “Between 2012 and 2018, contracts awarded under the NSS are estimated at $10.2 billion and generating 9,666 jobs,” Minister Qualtrough said, adding that the program has been successful in leveraging opportunities on the “social side” with contracts for indigenous businesses and shipyard training and apprenticeship programs. “These social and economic benefits can be felt right across the country,” she said.

As the luncheon keynote speaker, Minister Bruce Ralston (Jobs, Trade and Technology, Province of BC) spoke to the importance of the ABCMI and the marine industry on Canada’s West Coast.

“Having the entire industrial marine supply chain here under one roof is a testament to the growing strength of this sector with much credit going to ABCMI,” he said. Minister Ralston went on to emphasize the significance that shipbuilding and marine activities have had on the West Coast for over 130 years, “ever since Esquimalt became home to shipbuilding and repair when the Royal Canadian Navy first established a dry dock here in 1887. Fast forward to 2018 and B.C.’s vibrant marine sector employs over 20,000 people and is a valuable contributor to our economy, making up about seven to eight per cent of our GDP.” In addition to citing examples of activities within the shipyard sector — Seaspan’s portion of the National Shipbuilding Strategy;

The ABCMI team — Leann Collins, Emma Collins and Alex Rueben — stand with the Honourable Carla Qualtrough, Minister of Public Services and Procurement and Accessibility, Government of Canada (second from left) who made a major federal funding announcement for the Association.

BC Ferries’ ambitious vessel replacement program; and, Victoria Shipyards’ work on New Zealand frigates (the first time a Canadian shipyard has conducted work on a foreign military vessel) — Minister Ralston highlighted the important research and innovation component of B.C.’s industrial marine sector, including some of the country’s best ocean sciences and technology companies.

February 2019 — BC Shipping News — 51

EVENT RECAP “We are on the cusp of spending about $3.9 billion in capital expenditure in the next 10 to 12 years ... and we are focused on how we can bring a maximum amount of benefit to B.C...” regional communities to access markets for goods and services across Canada and internationally.

Another keynote presentation came from Mark Collins, President and CEO, BC Ferries and one of the founding members of ABCMI. “We are on the cusp of spending about $3.9 billion in capital expenditure in the next 10 to 12 years,” he said in his opening remarks, “and we are focused on how we can bring a maximum amount of benefit to B.C. while still reaching out and serving the needs of those coastal communities that depend on our services.” He went on to recap the significant investments made to meet their mandate, including three key areas of focus: 1) BC Ferries’ Clean Technology Plan — BCFS has invested $350 million over the last five years in clean technology — by far, the leading adopter of clean technology of any ferry system in North America.

Photos courtesy ABCMI

“We understand that the key to improving our competitive advantage within the global economy is to remain at the forefront of emerging trends and opportunities including the rapid pace of change in technologies,” he said, citing examples of the B.C. government’s initiatives like the recently established Emerging Economy Taskforce, investment in skills training, supplier development and research and innovation. He further noted that the B.C. government is helping the sector continue to grow through shipbuilding and ship repair industrial tax credits; funding key studies such as an assessment of the current and proposed dry dock capacity in B.C. and the West Coast; working with organizations like ABCMI that demonstrate the ability to drive opportunities in support of industrial and workforce development; and, through the Export Navigator Pilot program, assisting businesses in smaller

2) Underwater Noise Mitigation Plan — Given that the ferry system has 174,000 sailings per year, by default, they are the largest emitter of noise for the area. To address this issue, BCFS has taken proactive steps to incorporate new technologies and new designs into the fleet to lessen their impact on Southern Resident Killer Whales; and through revisions in operations — for example, every BC Ferry captain has authorization to alter the course of the vessel if safe to do so in order to avoid whales.

3) Shipbuilding Plan — Collins started by addressing the issue of building ferries offshore, recognizing the challenges in both capacity and cost but emphasizing that where ever possible, the goal is always to maximize benefits for British Columbia. Indeed, in a review of past historical spending patterns, Collins highlighted the impact the company has had on B.C.’s economy and the marine sector in particular, especially since the restructuring in 2003. In addition to investing close to $4 billion in its fleet renewal program, BC Ferries is also investing $150 million in the Dees

Clockwise: B.C.’s Minister of Jobs, Trade and Technology; panel session on future fleet plans; Tim Page, ABCMI President and Vice President, Government Relations, Seaspan Shipyards; Mark Collins, President and CEO, BC Ferries.

52 — BC Shipping News — February 2019

EVENT RECAP Facility and $1 billion in shore-side development.

Another important presentation was that from Gavin Sears, Contracting & Procurement Manager with LNG Canada.

After providing a brief background on the Kitimat project and scope of the facilities, Sears outlined the project schedule for construction, including site preparation and construction as well as terminal and marine berth development. He further described the anticipated needs both during construction and once operational, including barging services and harbour and escort tug requirements.

Panel sessions

A total of four panel sessions were held throughout the day: Each provided valuable insights into business opportunities, future fleet plans, permitting new marine projects and maintenance works, and marine innovation. The following is just a small sample of the information attendees heard about the opportunities available in B.C.’s marine sector.

Panel 1: Business Opportunities — Moderated by Tim Page, Seaspan Shipyards’ Vice President of Government Relations and President of the ABCMI, the first panel focused on business opportunities, providing key insights into ongoing and upcoming work as well as ways in which suppliers could access information on those opportunities to be able to submit bids. For example, Mike Homer, COO, Babcock Canada, described a supply chain process based on categorization of needs like professional services, engineering, naval architecture, welding, technology or equipment. “Through our ITB (Industrial Technological Benefits) policy, we are seriously looking for a large amount of Canadian content,” Homer said, adding that Babcock Canada was always looking for new ideas and alternatives that provide more cost-effective and efficient solutions.

Simon Hughes, Canadian Naval Programs, Business Development for Lockheed Martin Canada, provided an overview of current and upcoming projects on both the West and East Coasts and recommended that attendees register as a supplier with both Seaspan and Irving Shipyards in Halifax. Hughes further noted that opportunities within Canada could sometimes lead to additional opportunities internationally.

Additional panelists — Jamie McKinnon from Seaspan, Dennis Plonka with SNC Lavalin and Dale Potter from Thales Canada — in turn described their own projects and needs then offered guidance on how to access supplier portals and procurement processes. McKinnon described the status of various vessels being built under the NSS, including the Ocean Fisheries Science Vessels (one close to completion with the other two progressing through the shipyard), the start of issuing RFPs for 48 contracts for the Offshore Oceanographic Science Vessel, and the majority of long-lead items being sourced for the Joint Support Ships. Another highlight made during the presentations was the investments in training, research and development each company was making.

A lively discussion ensued, including a request for panelists to identify common mistakes made by suppliers in trying to access business opportunities. Responses ranged from not using the supplier platform portal correctly to failure to understand policies around procurement or properly articulating a company’s value-add proposition.

Panel 2: Future Fleet Plans — Following a break where attendees were able to engage directly with panelists, network with colleagues or visit the exhibit area with displays from companies like Babcock Canada, Seaspan, Camosun College and other training institutes, people reconvened in the large ballroom for the second panel. Focused on future fleet plans, representatives from BC Ferries, Canadian Coast Guard, Royal Canadian Navy, Public Services and Procurement Canada, and Western Canada Marine Response Corporation described the various new build projects planned for the near future.

The information imparted by panelists was worth the price of admission itself. For example, Paul Catsburg, Director, Vessel Replacement Program for BC Ferries outlined the full fleet renewal plan that is currently underway for the provincial ferry company, including some of the key design, technological and propulsion features that were being considered. Providing information for the Canadian Coast Guard, Alex Rueben not only gave an in-depth review of current assets, those under construction and those being planned for the future but he described how the CCG’s vessel renewal program was being developed with a theme

of multi-purpose and multi-capable configurations that would provide flexibility in meeting the core missions of the CCG. A particularly interesting presentation was given by Michael Lowry, WCMRC, who outlined the development of new response facilities, assets and suppliers should the Trans Mountain Pipeline Expansion Project ever receive approval.

Closing remarks

In his closing remarks, ABCMI Executive Director Alex Rueben spoke about the Association’s upcoming initiatives and events, including a study to look at human resource needs, investigating ways to incorporate more programs for surface mariners and other marine training programs that would benefit B.C. companies.

With a growing membership roster, increased funding to carry out many of the initiatives previously identified as well as identifying new opportunities where the ABCMI can have the greatest impact, Rueben encouraged those who were not yet members to join and those members who were not yet participating in programs already established to learn more about how the Association could help their business.

The 2018 ABCMI Business Opportunities Conference had over 200 delegates attending along with a number of exhibitors. The conference will continue to grow and focus on areas of interest and opportunities relevant to businesses in B.C’s marine sector. Mark your calendars now as the 2019 Business Opportunities Conference will take place in Vancouver, on November 13/14, 2019. BCSN

February 2019 — BC Shipping News — 53

Photo: Dave Roels

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