BC Shipping News - October 2018 by McIvor Communications

Shipping & Finance: Insights into commercial banking

Legal Affairs: The possible future of autonomous ferries

Shipping: Vancouver welcomes China Navigation Co

BC SHIPPING Commercial Marine News for Canadaâ&#x20AC;&#x2122;s West Coast.

Volume 8 Issue 8

NEWS

www.bcshippingnews.com

October 2018

Sustainable Shipping

How climate change is posing dramatic challenges to the maritime industry

Industry Insight Mark Collins President & CEO BC Ferries

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CONTENTS October 2018 Volume 8 Issue 8

NEWS

Cover Story

31 TECHNOLOGY

The future of anti-fouling

CARGO LOGISTICS

Export compliance risks in the supply chain By Darryl Anderson

36 BLOCKCHAIN

EDITOR’S NOTE

IN BRIEF

INDUSTRY INSIGHT

By Jane McIvor

Industry traffic and news briefs Setting the course for the next generation Mark Collins, President & CEO, BC Ferries With many vessels nearing end of life, Collins has a strategy that will set the path of B.C.’s coastal ferry network for the next generation.

26 HISTORY LESSON

A car that swims! Amphibious cars throughout history By Lea Edgar

Blockchain and the maritime industry By Georges LaRoche

SUSTAINABLE SHIPPING ‘An Oceanic Awakening’ and SEA20 herald a wake-up call

SUSTAINABLE SHIPPING

LEGAL AFFAIRS

Insights into commercial banking

42 SHIPPING

Vancouver welcomes China Navigation Co

46 BUNKERING

Suncor introduces ship-to-ship fuelling to the Port of Vancouver

SEAFARER TRAINING

Providing accessible and diverse learning opportunities for mariners By Amanda Schuldt

SHIPPING AND FINANCE

MULTI-PURPOSE VESSELS

Q&A: Canada’s multi-purpose vessel market

52 TUGS

Around the world with Robert Allan Ltd.

Changing the face of shipping? How climate change is posing dramatic challenges to the maritime industry By Michele Acciaro, Trevor Heaver and Jane Lister Nobody on deck The possible future of autonomous ferries By Glen Krueger

On the cover: BC Ferries’ Coastal Renaissance (photo: Dave Price); above: the Santa Regina in English Bay (photo: Dave Price); right: the Gökçay II (photo courtesy Robert Allan Ltd.); left: Mark Collins (photo courtesy BC Ferries). October 2018 — BC Shipping News — 5

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October 2018 Volume 8/Issue 8

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.

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Proud member of: 300 – 1275 WEST 6TH AVENUE, VANCOUVER, BC V6H 1A6 T: 604-893-8800 / F: 604-708-1920 E: JANE@BCSHIPPINGNEWS.COM 6 — BC Shipping News — October 2018

International Sailor’s Society Canada

EDITOR’S NOTE

Photo: Dave Roels

Digging in to the issues

hile this month’s BC Shipping News has a main focus on ferries (check out our exclusive interview with BC Ferries’ President & CEO Mark Collins for an in-depth look at B.C.’s coastal ferry network and what the future holds), there are some key articles that just as easily apply to any sector of the industry. I encourage you to dig in and consider these articles in this larger context. First, Amanda Schuldt has done a great job in working with Buki Hough, Western Maritime Institute, to identify the issues of seafarer training. In addition to highlighting the attributes of WMI, Hough and Schuldt review the topics of training standards, technology and the challenges of recruitment and retention.

Next up, we tackle sustainable shipping including the announcement of an exciting initiative from Wärtsilä that establishes an industry forum to proactively address issues such as fuel efficiency, congestion in ports and high traffic areas and real-time communications amongst stakeholders. And I especially encourage you to read the article from Michele Acciaro, Trevor Heaver and Jane Lister (Centre for Transportation Studies, Sauder School of Business, UBC) who take a realistic look at what it’s going to take for the marine industry to meet the emission-reduction goals established by the IMO’s Maritime Environmental Protection Committee. The authors underscore the urgency that we face as an industry to address the challenges of achieving true sustainabilty.

And there’s still more! From new technology on anti-fouling, insights into commercial banking, the risks of noncompliance in cargo logistics and even a primer on Blockchain technology and how we are witnessing a revolution in data sharing that will bring a whole new level of collaboration to the maritime industry. Wait. There’s even more! From clebrating Swire’s China Navigation Co’s new Vancouver office, to a new ship-toship bunkering service from Suncor and insights into the multi-purpose vessel market on Canada’s West Coast, I fully expect you’re going to be impressed. So get comfortable, you’re going to have a hard time putting this month’s BC Shipping News down. I hope you enjoy. — Jane McIvor

October 2018 — BC Shipping News — 7

INDUSTRY TRAFFIC

SCHOTTEL appoints new CEO and creates two main business areas for maritime industry

Mr. Stefan Kaul as new Chief Executive Officer (CEO) & President, Industrial Operations (right) and Mr. Hans Laheij (left) who has been appointed Deputy CEO & President, Marine at SCHOTTEL. 1921, the company has been developing and manufacturing azimuth propulsion and manoeuvring systems, complete propulsion systems with power ratings of up to 30 MW, and steering systems for vessels of all sizes and types, for about 65 years. Around 100 sales and service locations worldwide ensure customer proximity.

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CHOTTEL has announced that it has appointed Mr. Stefan Kaul as Chief Executive Officer (CEO) & President, Industrial Operations. The appointment follows the departure of Dr. Christian Strahberger who has decided to leave the company. Kaul joined the company in 1989 and has held several key positions in research and hydrodynamics. He has built up significant experience within the marine propulsion business. Since 2007, Kaul has held the position of Chief Technology Officer (CTO) and was responsible for all engineering activities. At the same time, SCHOTTEL has announced that it will create two business focus areas to increase the company’s operational effectiveness and further increase the focus on delivering customer value. The ‘Industrial Operations’ business area will ensure effective processes for customer deliveries, while the business focus area ‘Marine’ will focus on all Global Sales, Marketing and Services activities and customer contacts. Besides his duties as CEO, Kaul will also lead the business area ‘Industrial Operations.’ In connection with the changes in business structure, Mr. Hans Laheij has been appointed Deputy CEO & President, Marine. Laheij joined the company in 2016 and has since then held the position of VP Sales & Marketing at SCHOTTEL. Laheij has a long working experience in the maritime business and previously worked in various commercial and project management roles at Lips Propulsion and Wärtsilä Marine Solutions. He was working in Asia and stationed in Shanghai, China before moving to Germany to join SCHOTTEL. “With this change, we will be able to further focus on delivering customer value and optimize our design, manufacturing and delivery processes,” says Prof. Gerhard Jensen, CEO of SCHOTTEL Industries. “SCHOTTEL will continue to be an agile company with high customer focus. With the appointment of both Stefan Kaul and Hans Laheij, I am confident that we can continue to build an even stronger SCHOTTEL in the coming years,” says Knut Herman Gjøvaag Chairman of the Board. The SCHOTTEL Group, with its headquarters in Spay/Rhine, is one of the world’s leading manufacturers of propulsion and steering systems for ships and offshore applications. Founded in

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8 — BC Shipping News — October 2018

NEWS BRIEFS

Clear Seas and Vard Marine release Emergency Towing Needs Assessment

hen a commercial ship is disabled and drifting offshore an effective emergency response requires towing assets with sufficient capabilities to be able to render useful assistance. The emergency towing vessel (ETV) must be able to arrive on scene in a timely manner, successfully attach a tow line, and have sufficient power to tow the disabled ship to a safe location for assessment and repair. A new study, commissioned by Clear Seas and produced by Vard Marine Inc., analyzes emergency towing needs for different types of large, high windage ships to identify the capabilities which a single ETV should have to be able to render

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

assistance to a disabled ship. Seven ships were selected to represent container ships, LNG carriers, vehicle carriers, passenger ships (cruise ships), bulk carriers and oil tankers. These ships either operate in Canadian coastal waters or are expected to do so in the future. The report concludes large and powerful ETVs are needed to cope with the difficult conditions off Canada’s Pacific Coast. It goes beyond propulsion power and bollard pull needs to highlight other characteristics such as ship attachment points, ETV reach and endurance, and human factors. This study is part of the Marine Transportation Corridors project sponsored by Clear Seas to inform decision makers, response professionals and the public regarding the capabilities required to respond to emergency towing scenarios. The results presented in this report are drawn from traffic transiting Canada’s

A new study released by Clear Seas. Pacific coast, but the conclusions are relevant elsewhere, as similar types of ships encounter comparable wind and wave conditions in Canada’s Atlantic region.

Canadian Ferry Operators Association 2018 Conference Whistler, B.C. (September 30 to October 2, 2018)

Interferry 2018 Conference Cancun, Mexico (October 6 to 10, 2018)

Maritime Security Challenges 2018: Pacific Seapower Victoria, B.C. (October 15 to 18, 2018)

CITT’s Canada Logistics Conference 2018 Vancouver, B.C. (October 24 to 26, 2018)

State of the Island Economic Summit Nanaimo, B.C. (October 24 to 25, 2018)

ABCMI Business Opportunities Conference Vancouver, B.C (November 14, 2018)

Pacific Marine Expo Seattle, WA (November 18 to 20, 2018)

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

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

October 2018 — BC Shipping News — 9

NEWS BRIEFS

Don Krusel appointed as managing director of the Port of Québec’s container terminal project

ario Girard, President and CEO of the Québec Port Authority (QPA), is pleased to announce that Don Krusel has been appointed managing director of the Port of Québec’s project to build a container terminal. Krusel is a major figure in the North American port world. He was the president and CEO of the Prince Rupert Port Authority for 25 years. Under his leadership, the Port of Prince Rupert created a new container port gateway for North American trade, and as a consequence, transformed the Port of Prince Rupert from a small and regional forest

and agricultural products facility into the fastest growing container port in North America. Since retiring from the Port of Prince Rupert in September 2017, Krusel has worked as a consultant and was a member of QPA’s expert panel on the creation of a deepwater container terminal. With this appointment, Krusel will be fully engaged in managing the container terminal — a major expansion project for the Port of Québec. “Bringing Don Krusel on board at this decisive phase in the project is a strategic move that will provide us with welcome

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high‑level leadership. His reputation in the industry, his in‑depth knowledge of port operations, and his commitment to the success of the container terminal are all major assets that will help us get Québec City’s deepwater container terminal built,” said Mr. Girard. The Port of Québec has expansion plans in the Beauport sector that would see 17 hectares of graded land added to adjacent available lands, for an additional 610 metre-wharf line with a depth of 16 metres. The Port of Québec would use the new land to build a new deepwater container terminal.

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NEWS BRIEFS

MAN extends sponsorship of Mercy Ships

t a signing ceremony at the SMM 2018 Marine Trade Fair in Hamburg, MAN Energy Solutions extended its partnership with Mercy Ships, international provider of charitable healthcare, for a further two years with an option to extend the agreement again at that time. Dr Uwe Lauber, CEO of MAN Energy Solutions, and JensErik Engelbrecht, CEO and Chairman of Mercy Ships Denmark, represented their respective companies at the event at MAN Energy Solutions’ stand. As such, MAN Energy Solutions is continuing as sponsor of the ‘Africa Mercy,’ the world’s largest, civilian hospital ship. Under the terms of the agreement, Mercy Ships will receive further spare-parts free of charge for the MAN installations aboard the Africa Mercy — worth a total of EUR 500,000 — divided over the two years leading up to December 31, 2020. Dr Lauber said: “We are delighted to continue our partnership with Mercy Ships and to support such a worthy cause that provides crucial medical treatment to some of the world’s most deprived people. MAN Energy Solutions’ support of the Africa Mercy is important as it reflects our sense of social responsibility and the ethical way we seek to do business.” Jens-Erik Engelbrecht said: “The extension of the agreement between MAN Energy Solutions and Mercy Ships supports and ensures the important work of powering our hospital ship, Africa Mercy. The professional day-to-day support and cooperation with MAN Energy Solutions to provide electricity and power is fantastic. The agreement releases substantial funds to help Mercy Ships bring hope and healing by providing free surgery to people in West Africa that have very little access to necessary medical care.”

The Africa Mercy

The Africa Mercy is a converted Danish rail ferry, built in 1980, and includes a fully equipped hospital with facilities for 400 volunteers that have their home on board. She is a fully operational sea-going vessel, and officially classed as a passenger ship. MAN Energy Solutions’ and Mercy Ships’ partnership started in 2010 with

Jens-Erik Engelbrecht, CEO and Chairman of Mercy Ships, Denmark (left) with Dr. Uwe Lauber, CEO, MAN Energy Solutions at the SMM signing ceremony. the delivery of 4 × MAN 5L21/31 GenSet engines at a favourable cost for the Africa Mercy. The relationship continued in 2014 when MAN Energy Solutions supplied services and training for the maintenance of the engines on board the hospital ship. At SMM 2016, the parties entered a sponsorship agrement, since when MAN Energy Solutions has delivered spare parts worth EUR 750.000 to the Africa Mercy free of charge.

About Mercy Ships

Mercy Ships uses hospital ships to deliver free, world-class health care services, capacity building and sustainable

development to those without access to health care and to reinforce medical capacity building in the area of health care. Founded in 1978 by Don and Deyon Stephens, Mercy Ships has worked in more than 70 countries providing services valued at more than $1.2 billion, treating more than 2.5 million direct beneficiaries. Professionals including surgeons, dentists, nurses, health care trainers, teachers, cooks, seamen, engineers, and agriculturalists donate their time and skills to the effort. Mercy Ships seeks to transform individuals and serve nations one at a time. Mercy Ships is headquartered in Texas and has 16 national offices (including Canada) distributed internationally.

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October 2018 — BC Shipping News — 11

INDUSTRY INSIGHT

Setting the course for the next generation Mark Collins, President & CEO, BC Ferries

ark Collins took the helm of BC Ferries in 2017 at a critical time in the organization’s 58-year history. With many vessels nearing their end of life, the ferry company is set for a wholesale change that will see fewer, more standardized classes of vessels and advanced technologies that will lower their environmental footprint even further. Another change that is evident under the leadership of Collins is the values of engagement and collaboration with coastal communities he has incorporated into their vision and mission. As BC Shipping News readers will learn from the following interview, while Collins works to address a ferry network that is at capacity, he’s doing it with the next generation in mind. BCSN: Let’s start by looking at the career steps you’ve taken that have led to your current position and the strengths you gained along the way. MC: I started my career in the marine industry in 1983 as a marine engineering cadet at the Marine Institute of Memorial University in Newfoundland (as it is now called). It was a three-year co-op program that alternates between the classroom and practical work so was exposed to a number of different ships — offshore supply vessels, container ships, bulk carriers, etc. After graduating in 1986, I went to sea for a couple of years, mainly bulk carriers and fishing vessels including a freezer trawler off Greenland. 12 — BC Shipping News — October 2018

...capacity and resilience are the two words that best describe our focus right now but also, affordability is never far from our mind. In 1988, I enrolled in St. Mary’s University in Halifax and obtained a Bachelor of Arts in Marine Geography. It was a fascinating program but you don’t see many job postings for geographers and, as I wanted to stay in the marine industry, came out to UBC to take my MBA in Transportation and Logistics. After graduating in 1992, I returned to Newfoundland where the Hibernia Oil Project had just been approved. I got my start as the sales manager for a small marine electrical services firm. This was a turning point for me — we were a small company with about 15 staff and we beat out the likes of General Electric, Westinghouse and Siemens for the contract for the M20 Wellhead project, a component of the Hibernia project, the biggest marine logistics operation in Canada at the time. From there, I was recruited by the Ulstein Group in 1995, which was later acquired by Rolls Royce Marine and worked my way up from sales manager to Vice President of Sales and Customer Service in the Coquitlam plant before heading over to the international division to become President of Rolls Royce Marine Italy and then Rolls Royce Marine Brazil.

Aside from a short stint as Vice President of Global Technical Services for the CSL Group in Montreal, I’ve been with BC Ferries for the last 14 years. I started in 2004 as Vice President, Corporate Engineering and Asset Development before becoming Vice President, Engineering. After leaving in 2012 to join the CSL Group, I returned to BC Ferries as the Executive Director of Project Management and was then promoted to Vice President of Strategy and Community Engagement in early 2016 before throwing my hat in the ring for the President’s position. In looking at my work history in terms of strengths, having been to sea really resonates with me. I’ve been in that world and made my living as a ship’s crew and that really helps — I use it consciously and unconsciously every day. Also, while you may not think it, the Marine Geography Degree has really helped me understand the marine industry’s position within the world. It was some of the best education I ever had. BCSN: What are some of the challenges BC Ferries faces today? MC: Our number one challenge is meeting the needs of ferry users and communities. A major challenge right now

INDUSTRY INSIGHT is capacity. BC Ferries’ infrastructure is now running a higher throughput than it ever has and we are putting more people, cargo and vehicles through our system than at any other time in history. I have to recognize the efforts of our employees who are managing to get great efficiencies out of the system but we can see the pressure points. Long weekend line-ups and sailing waits are nothing new but we have had a few more this year because the system is so full and we have no spare ships. So capacity and resilience are the two words that best describe our focus right now but also, affordability is never far from our mind. While that remains a priority for us, it has been overtaken by concerns about capacity and lack of resilience. BCSN: At the Mari-Tech 2018 Conference in April, you described a new vision for BC Ferries that includes greater efforts for public engagement. How does this tie in with your efforts to build capacity and resiliency? MC: If we look at the downturn that occurred between 2008 and 2014 — when traffic fell about 15 per cent — and

Mark (third from right), the first President of the Association of BC Marine Industries, stands with his first board of directors. the resulting government decision to decrease service to avoid huge increases in fares, we were faced with an extremely divisive situation. Communities were unhappy with the lower number of sailings. We’ve since increased services as traffic volumes rebounded (in fact, we now have more sailings in total than we did before the 2012 downturn) but there was a

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lot of broken trust between BC Ferries and coastal communities. To avoid a replay of that time, we have developed a two-prong strategy: first, to diversify our revenue so that when traffic drops again (because it will – there’s always a cycle to the business) our revenue doesn’t collapse; and second, to build trust with communities — to get out there, really listen and understand their needs.

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INDUSTRY INSIGHT If we can build a trust-based relationship now when times are good, when traffic turns downward again, we’ll be in a better position to work with communities as partners to address the service together. It’s about bringing the communities and the people who use our service into the decisions that affect them. BCSN: What about the diversification of revenue? MC: We did some diversification in 2006 to 2008 when we started the drop trailer business and BC Ferries Vacations and that certainly helped however, those activities are not fully divorced from the normal business cycle. We need to be involved in revenue streams that move counter-cyclical to our traffic volumes. There are two ways to diversify: first, stay in home market but get into different businesses with a different business cycle; and second, stay in the same business but move outside the market to a different geography that might move in a different cycle. So we’re thinking about opportunities like that but are mindful we don’t take on risks which will undermine our stability and sustainability at home. BCSN: You mentioned earlier that you’re running a higher throughput than ever before. Could you provide a snapshot of current operations and your plans for increasing capacity? MC: During our 2017/2018 fiscal year, we recorded the highest passenger counts in 20 years and the highest vehicle counts ever in our history. We delivered over

Bringing additional capacity to the system is a big part of our upcoming contract renewal process with the BC Ferries Commissioner and the Provincial Government. 174,000 sailings to 22 million passengers and 8.7 million vehicles. On average, that’s more than 470 sailings, 60,000 people and 23,000 vehicles every day. And the trends we’re seeing for this year indicate a new record for vehicles and surpassing our alltime record for passenger volumes. Bringing additional capacity to the system is a big part of our upcoming contract renewal process with the BC Ferries Commissioner and the Provincial Government. To allow the Commissioner to recommend a price cap, we provide our estimates of costs for operations and capital expenditures. While operating costs are fairly steady year over year, how much we plan to spend on our capital assets is a significant variable. I should note that we’re responsible to raise all of our own money to build our ships. Unlike Washington State Ferries or Alaska Marine Highway who receive funding from the U.S. Government, and the B.C. Inland Ferries operated by the Ministry of Transportation and Infrastructure, we get no money for shipbuilding and must fund all improvements to the ferry system from our own sources. So our capital plan and the number of new builds we have in that plan play a large part in determining the rates.

Planned vessel replacements over the next 13 years. 14 — BC Shipping News — October 2018

Back to your question about increasing capacity, we recognize that the system is full. We’re going to the BC Ferries Commissioner with a growth plan to expand the size of the coastal ferry network. This will be the first major expansion of capacity in 15 years. The capital plan proposes to add to the fleet incrementally. For example, of the 11 or 12 major vessels currently in operation, if we retire five, we’ll build six; for the minor vessels, we have a strategy called “Two-for-One” which will see one medium-size ship replaced with two smaller ships which will add roughly 50 per cent additional capacity. The advantage there is that we won’t need a major reconstruction of terminals and local road networks won’t require upgrades either because traffic off each vessel will be metered better. BCSN: Will this mean an increase in crew? MC: We don’t know at this time as that will be up to Transport Canada who sets the crew requirements. However, it shouldn’t be more because the smaller ships are easier to operate and will be more modern with better technology. BCSN: Could you provide an overview of the upcoming new builds? MC: Sure. In addition to the three new Salish Class vessels we brought in, the refurbishment of the Northern Sea Wolf is just wrapping up and will be entering the fleet in the coming months. The Spirit of British Columbia just returned from a mid-life upgrade and conversion to LNG and the Spirit of Vancouver Island is just about to undergo the same. There are a couple of world firsts related to this project: not only are they one of the largest passenger vessels to ever be converted to LNG, we believe they are the only ships converted to LNG-mechanical propulsion (usually, it’s LNG-electric). In addition, there is the new conceived in B.C. technology that allows for on-deck fuelling. That’s never been done before. We’ve got two ships under construction right now — one for the Texada Island/

INDUSTRY INSIGHT Powell River run and the other for Port McNeill/Alert Bay/Sointula — these are the first two of the Island Class electrichybrid ships. We currently have a request for pre-qualification issued for replacements of the Bowen class — the Bowen Queen, Mayne Queen and Powell River Queen and we’re proposing to replace those three with five new ones — four Island Class electric hybrids and one Salish Class vessel. These new builds highlight our strategy for reducing and standardizing the number of vessel classes we’ll have. It not only standardizes training, parts and repairs but it also takes about one year out of the procurement process as the design and specs are already done. It’s an enormous efficiency improvement. After the Bowen replacements, we’ll be moving straight into a major vessel replacement program for the venerable C Class — Queen of Coquitlam, Queen of Surrey, Queen of Cowichan, Queen of Oak Bay and Queen of Alberni. They’re the backbone of our fleet and we love them but they’ve been running since the

Upon signing the contract for two Island Class ferries to be built by Damen Shipyards Galati in Romania (with final commissioning to be done by B.C.’s Point Hope Shipyard), Mark shakes the hand of Leo Postma, Damen Sale Manager Americas while Henk Grunstra, Damen Product Director looks on. 1970s and 1980s. By this time next year, we’re hoping we’ll be out in the market with a request to build six major vessels to replace those five, possibly even seven because we’ll have to retire the Queen of New Westminster soon as well. These are

big ships – in the range of 350 AEQ, 2,100 passengers, 21/22 knots. When you think about it — and in context of our vision for the company — these major vessels will be connecting communities and serving the people of B.C.

October 2018 — BC Shipping News — 15

INDUSTRY INSIGHT for the next 50 years. They will represent the backbone of the coastal ferry network through the middle half of this century. I want to trigger in people the sense of import about how significant this is for coastal transportation for B.C. BCSN: That leads me to ask about the type of propulsion and power generation you’re planning for these. MC: We’re always looking ahead and are mindful that the future is low carbon so we’re driving toward that. We recently released our Clean Technology Adoption Plan which describes the initiatives we’ve undertaken to date with over $350 million invested in clean technology in the last five years; and our commitments for further carbon reduction and more environmentally sustainable operations. You won’t find another ferry company in North America who’s done more than us. Right now, the best technology available for medium- to long ferry routes is a natural gas-diesel dual fuel option, such as you see in the Salish and Spirit Classes. Because these ships are going to be with us a long time, we’ve put in engines that can burn LNG, the cleanest burning marine fuel available. For the Island Class vessels, they are designed with diesel-electric hybrid propulsion, with space for extra battery banks to move to electric operation in the future. The ideal would be to go full electric on shorter routes but we first have to get the hydro power to the docks. The expandable battery capacity will allow conversion to operate fully electric when the time comes - i.e. when a proven and reliable shore power transfer technology is available. BCSN: Electric will help not only with carbon emissions but with underwater radiated noise I imagine.

BC Ferries will be moving to five classes of vessels instead of the current 17, creating a number of efficiencies for the ferry network. 16 — BC Shipping News — October 2018

MC: Correct. We’re a founding member of the ECHO Program and we’ve been very engaged with the federal government and all stakeholders to address the Southern Resident Killer Whale issue. Because we have so much activity in the Salish Sea, BC Ferries is probably one of the biggest emitters of underwater noise because of our frequency on the water and we recognize our responsibility to be a leader in this. Every new ship built will be much quieter than its predecessor — the Salish Class vessels are the quietest ships we’ve ever had. There are other initiatives that focus on reducing our environmental footprint as well — for example, we no longer use underwater coatings with chemicals that can leak into the water; and over the last 10 years, we have converted the majority of our fleet to pump ashore systems for discharges. There are only two remaining but both have very good treatment plants. We’re dedicated to moving through the environment without consuming the environment. We want to be part of a harmonious eco system. BCSN: When you issued your last RFQ, you specifically encouraged Canadian and B.C. shipyards to participate. Could you provide some insights into efforts to support local yards, including your efforts through the Association of BC Marine Industries (ABCMI)? MC: We’re huge supporters of the marine industry in B.C. and spend about $150 million per year here for ship repairs, conversions and upgrades. Only the Royal Canadian Navy spends more on ship repair in Canada than we do. From our point of view, the most desirable outcome by far is to build locally but we’re dutybound to do what’s best for the ferry passenger — the ones who are ultimately paying for the new ships. If Canadian shipyards don’t bid or can’t submit a competitive proposal, we have no choice. By getting the most competitive bids we can build more ships on time with higher value for ferry users. Sometimes that is local and sometimes it’s international. The new government has shown some interest in supporting the shipbuilding industry but the way to do that is not by forcing BC Ferries to build inefficiently, but rather by getting the shipyards to be as efficient or as competitive as international yards. BC Ferries has been used four times since 1960 to stimulate shipbuilding; each time the shipbuilders have closed after the government projects were complete. That is not a great track record. Let’s not repeat the mistakes of the past. That’s where the ABCMI has proven to be effective. BC Ferries is a founding member and I’m a past president and one of the key messages we’ve been trying to get out is that B.C. yards need to work to their strengths to be able to compete with international yards. For example, B.C. yards will never be able to compete with China when it comes to steel bashing. And if it’s not China, then it will be Vietnam or the Philippines, etc. But steel bashing is a low-tech product. The industry here shows strength in the high-tech side of shipbuilding — the high-skill, high-value green technology components. BC Ferries works extensively through ABCMI and membership there is one of the best ways to learn about our needs in projects. A good example of this already in place is the contract between Damen Shipyards and Point Hope Shipyard to outfit the first two Island Class vessels currently being built. Damen will deliver the ships to Point Hope who will do some of the final commissioning.

INDUSTRY INSIGHT BCSN: I’d like to turn now to the shore-side infrastructure. Could you describe future plans for the terminals? MC: We have community consultations ongoing now at both Horseshoe Bay and Swartz Bay. Swartz Bay is driven not so much by vehicle capacity as it is by foot capacity. The buildings, layout of the lounges and the drop off zone are a bit inadequate for the foot passenger volume we’re seeing today so there is some efficiency to be gained. Otherwise, Swartz Bay is in pretty good shape with five modern berths. Horseshoe Bay is more of a challenge. It’s very constrained — we have a major intersection on one side, the ocean on the other, a cliff to the right and a village to the left — and it’s one of our busiest terminals. We’re looking at an investment potentially upwards of $200 million. The berths and the terminal date back to the 1970s. While the terminal was rebuilt in the 1990s, that was well over 20 years ago and there are better ways of easing the congestion — for example, using our reservation system more strategically to allow traffic to be staged more rationally so that passengers can show up 30 minutes prior to sailing instead of waiting for hours. This will also mean a redesign of the staging area. Another big change will be the installation of active lift berths with ramps mounted on hydraulics that actively compensate for the change in the draft of the ferry as its unloading. The current berths at Horseshoe Bay are still the 1970-style hanging berths — every time the ship changes draft, they have to stop the traffic, make adjustments and then get going again. That will be a big

About Mark Collins

ark F. Collins is a marine executive, having held leadership positions with BC Ferries for 11 years before becoming President & CEO. He was BC Ferries’ Vice President, Engineering from 2004-2012 and Vice President, Strategic Planning & Community Engagement from 20142017. His 35 years of marine experience also includes being President of Rolls Royce Marine Brazil and Rolls Royce Marine Italy, as well as several years in marine engineering on oil tankers, bulk carriers and container vessels. Collins has a Master of Business Administration (MBA) in Transport and Logistics from the University of British Columbia, a Bachelor of Arts in Marine Geography from Saint Mary’s University and a Diploma of Mechanical (Marine) Engineering from Memorial University of Newfoundland. Mark understands the importance of a reliable ferry service to people’s lives, and to the social and economic health of B.C.’s coastal communities. Born on the ferry dependent island of Newfoundland, Mark is married with three children and resides in Victoria.

part of getting efficiency out of the terminal. We expect to start construction in the early 2020’s. BCSN: Earlier, we touched on crew and a higher quality of jobs on the new vessels. I’d like to ask first about recruitment (are you finding enough employees to counter retirements?) and second, about training, especially for the new vessels and their different technologies. MC: We have over 4,000 employees and there will always be retirements but we work hard to capture the knowledge of retirees before they leave through mentoring and apprenticeship programs. We have also grown our training program over the last three years as we encourage people to move up internally. In terms of recruitment, we’re reaching out internationally in addition to local and national searches. The Canadian market is just not supplying enough mariners. It doesn’t matter what part of the country you consider, everyone is short of mariners so we need to look outside of Canada where appropriate to do so. I won’t sugar-coat it though, it’s a challenge. We’re chronically below complements, probably by about 20 or 30 vacancies for marine crew at any given time. We’re compensating for vacancies with people on overtime. That’s not a long-term solution. One thing that will work in our favour going forward is the standardization of classes. We’re moving from 17 to five which will standardize training and allow for less disruptive transitions of crew between ships. Of course, our employees are dedicated to making sure safety is always our highest value. Last year we won the Marine Employer of the Year Award by Safety at Sea Magazine in London and we also won the DuPont Global Safety Award which is given out every two years to a company in any industry, anywhere in the world. BCSN

About BC Ferries

C Ferries was incorporated on June 15, 1960 as the British Columbia Toll Authority Ferry System. It started out with two ships, two terminals, and around 200 employees. In April 2003, BC Ferries was transformed from a Crown Corporation into an independent, commercial organization under the Company Act. Today, with 36 vessels, 47 terminals and 25 routes, BC Ferries employs over 4,000 employees. In Fiscal 2017/18 (year ended March 31, 2018), BC Ferries delivered over 174,000 sailings to 22 million passengers and 8.7 million vehicles. With a mission of connecting communities and customers to the people and places important in their lives, BC Ferries’ core values revolve around safety, caring, honesty, collaboration, respect and sustainability.

For more information: www.bcferries.com October 2018 — BC Shipping News — 17

HISTORY LESSON A car that swims! Photo: Dave Roels

Amphibious cars throughout history By Lea Edgar Librarian & Archivist, Vancouver Maritime Museum

itting in long ferry lineups steers the imagination in fanciful directions. What if one could just drive into the water and sail across? While this idea is impractical for many reasons, that didn’t stop many inventors from trying to sell consumers on that very thing. Amphibious vehicles may bring to mind mid-century secret agents or perhaps even inventor Caractacus Pott and his miracle car, Chitty Chitty Bang Bang, but these contraptions had their start in very practical pursuits. The earliest design on record was the Amphibious Digger (Orukter Amphiboles). Built by Oliver Evans in 1805, the vehicle was constructed as a dredge to deepen a dock on the Schuylkill River in Pennsylvania. It was essentially a barge with wheels to get it from the workshop to the river. Nevertheless, it still counts as the first amphibious vehicle. The next design on record was a sail-powered wagon invented by Gail Borden in 1849. Although this vehicle worked well on land, it capsized on water due to a lack of ballast to counteract the wind. By the 1870s, the first useable amphibious designs were built. Logging companies relied heavily on rivers to transport their goods. However, slow-moving streams could cause log jams that made getting the product downstream difficult. Thus, the steampowered alligator tug was invented. By using a winch and an anchor, it could haul itself out of the water and over to the next river where it was needed. It was not very efficient at moving over land, however, it was very good at moving logs and was consequently used in North America into the 1930s. The next major development in amphibious vehicles came with the rise of the gas-powered automobile. At this time, inventors were experimenting with oversized wheels. These designs never truly took off and it wasn’t until the Second World War that amphibious vehicles were used in earnest. Both the Germans

Alligator tug in boom, August 1908. Archives of Ontario. Item number C 120-3-0-0-151. 18 — BC Shipping News — October 2018

Amphibious vehicles may bring to mind mid-century secret agents ... but these contraptions had their start in very practical pursuits. and the Allies created new vehicles to transport troops and equipment over land and water. The Germans developed the Landwasserschlepper (LWS) which was essentially an amphibious tractor. It was ordered in 1935 to act as a lightweight river tug to help with bridge building and crossing rivers. This model was used until the end of the war, most successfully in North Africa and Russia. At the same time, the British and Americans were developing their own amphibious vehicles, called Landing Vehicles, Tracked (or LVTs). These followed the tractor design of the LWS. However in 1942, the more notable six-wheeled DUKW (or duck) was developed in the United States. It had a hollow yet airtight body and a single propeller. It was so successful, the American military produced 20,000 units during the war. It was used to ferry troops, supplies, weapons and equipment to the beaches of Normandy in 1944. Sadly, due to overloading and rough seas, some of the ducks sank, killing the soldiers they carried. After the war, many were sold as surplus to tourism companies. One such duck was used as a ferry for the then 25 property owners on Piers Island in the 1960s. The “ferry” was named Piers Island Princess. Today, this service is carried out by a more reliable private water taxi. Another amphibious vehicle that gained some popularity with civilians was the Amphicar. This car was manufactured in Germany between 1961 and 1967. Designed by Hans Trippel, approximately 4,000 were built and the majority (approximately 3,700) went to America. Today it is estimated that there are 500 still in regular use. The Amphicar remains the only non-military amphibious vehicle commercially produced (more than 100 were made). As manufacturing was exceedingly expensive, the vehicle never really took off. Today, however, there are numerous enthusiasts who cherish and restore these cars. These little boatcars have surprisingly made some serious sea crossings: from Africa to Spain, San Diego to Catalina Island, and even across the English Channel three times! This little car has even been taken across the Strait of Georgia. In 1963, Henry Smood of Alberni drove his Amphicar from the Tsawwassen ferry terminal all the way to Crofton on Vancouver Island. The car was in the water for a total of four hours and, for six miles, it had to tow another Amphicar behind it. The cars encountered rough water in Active Pass and landed at Galiano Island where they had a brief stop

VANCOUVER MARITIME MUSEUM

President Lyndon B. Johnson driving an Amphicar, 1965. Yoichi Okamoto. LBJ Presidential Library, catalog A263-8.

Vic Reventlow changing a flat tire during the Yukon Flotilla, 1967. The Margaret Borrecco Collection. Photographers: Ed and Dolores Borrecco.

before carrying on to Salt Spring Island. From there, they went over land until the final stretch over water to Crofton. One more local story regarding the Amphicar is that of the 1967 Yukon River Flotilla. A 10-day, 460-mile trip from Whitehorse down river to Dawson City was planned as a joint Alaska-Yukon Centennial project. Fifty-four craft were used, of those, four were Amphicars. The owners of the Amphicars were all Americans from Alaska. On August 16, the flotilla, including the Amphicars, made it to Dawson City where Discovery Day celebrations were in full swing. If these little cars can make

this kind of trip, it is not surprising that they are such popular collector’s items today. From dredges to troop transports to novelties, amphibious cars appear here to stay. Modern designs include the Panther-built WaterCar, the Gibbs Aquada, and the Terra Wind Amphibious RV. Designs for these vehicles keep coming, proving that our desire to drive from land to water and back again never ceases. Lea Edgar started her position as Librarian and Archivist for the Vancouver Maritime Museum in 2013. She can be contacted at archives@vanmaritime.com.

John M. Horton, Marine Artist Paintings and limited edition prints for corporate offices, retirement gifts and marine art collections

“Vancouver Bound” This specially commissioned painting features the tanker MT Kirkeholmen heading for Vancouver on one of her regular north bound transits.

For special commissions:

www.johnhorton.ca (604) 943-4399 / john@johnhorton.ca October 2018 — BC Shipping News — 19

SEAFARER TRAINING

Photo: Dave Roels

Providing accessible and diverse learning opportunities for mariners By Amanda Schuldt

estern Marine Institute (WMI) takes great pride in connecting both young and experienced mariners to extensive course diversity within a dynamic learning environment, regardless of location. As Canada’s largest private marine training college, WMI is responsive to the needs of industry through regular consultation and rigorous review from Transport Canada and continues to successfully remove location as a barrier to marine education by taking the classroom wherever it is needed.

History

of WMI. There was steady growth in the Bridge Watch Rating program, Marine Emergency Duties courses, and Fishing Master 3 and 4 Certificate courses. Buki Hough joined WMI in 2014 as an Admissions Advisor and since then there has been an average 35 per cent increase each year in enrollment. Harnessing her admissions recruitment background and supported by a dedicate administrative and instructional team, Hough is passionate about helping students “become who they are meant to be.”

Courses

WMI is a year-round school with courses for the upcoming academic year varying from a one-day course covering emergency duties on small domestic vessels to a nine-month long Watchkeeping Mates certificate. There are Fishing Master 3 and 4 Certificate courses as well as Mates and Master courses. Classes run

Photo courtesy Western Maritime Institute

WMI was established in 1989 by Captain Bob Kitching as a consultant marine education organization. In 2000, Maritime Education Associates (MEA) was formed by Captain Kitching and Captain Brian Silvester with the goal of filling a gap of offering marine training in remote BC communities. In 2008, the decision was made to continue with remote location training and couple that with a campus, based in Ladysmith, that would also have training equipment. In 2015, Fraser Education Inc. purchased the shares of MEA and took over the operation

As Canada’s largest private marine training college, WMI is responsive to the needs of industry through regular consultation and rigorous review from Transport Canada...

Buki Hough, WMI’s Campus Director, stands next to WMI’s Class B, fully integrated simulator which includes a full mission bridge. 20 — BC Shipping News — October 2018

each day from 8:30am to 5pm. Currently, the most popular courses taught at WMI include those related to STCW MEDs (Standards of Training, Certification and Watchkeeping Marine Emergency Duties) which teach practical, hands-on safety skills and firefighting, personal survival and passenger safety onboard vessels. STCW courses can be used on international foreign-going vessels as well as domestic ones. Other popular courses include Bridge Watch Rating program and the 150 and 500 gross tonnage Mates and Master courses and MED Refreshers. In addition, finishing touches are being made to WMI’s simulators and simulated electronic navigation courses that will be taught this fall. The popularity of these courses is a clear indication that marine industry careers are viable, as WMI attracts young people new to the industry, with very little sea time. It is also indicative that large marine companies (BC Ferries, Canadian Coast Guard) are increasing their recruitment efforts. Hough further points out that there is increased enrollment in block credit courses, so much so that over the past two years they have offered two strings of Meteorology, Chartwork and Pilotage. “It is a combination of awareness of WMI and what we offer and also where the industry is right now,” she said. “Because of the demand, companies are realizing that they need to release their crew to attend classes if they want to meet their obligations in the near future.” With greater urgency to get more people to that next level, given the attrition rates in the industry due to retirements, Hough describes the private college as being

SEAFARER TRAINING responsive to the needs of industry with a very “nimble” way of approaching course studies. “Schedules are not set in stone for any given year,” she said. “Where there is an interest in a particular course — either from a company or group of students — it is added to meet that need. This responsiveness sets us apart from other institutions.”

Students

The student body at WMI ranges from 18-year-old recent high school graduates who are just embarking on their marine careers and taking MEDs and/or the Bridge Watch Rating program, to mariners with decades of experience taking courses to advance their career or refreshers to maintain their current level certification. The age range of students creates a dynamic class environment as students meet people from other companies, allowing for a pooling of knowledge and varied experience in the classroom. Hough describes the “organic mentoring that happens outside of the classroom” and “the conversations that happen in the lounge

area.” On-campus connections allow students to learn from each other, connect and transition into new areas of the industry. “Our diversity has created a vibrant environment due to variations in age and ethnicity. We are especially proud of our reputation with the Indigenous marine community.” In any given year, we have instructors teaching in various Indigenous coastal communities, ensuring an ongoing connection.

Instructors

Instructors at WMI are audited regularly by Transport Canada to ensure they are meeting both TC and IMO standards. The majority are retired mariners with a passion for sharing their experiences and knowledge. “They take the courses beyond the theoretical level to enhance the experience for students and use practical exercises and their knowledge of industry to make the material come alive for students,” Hough said, pointing out that this adds to the learning experience, preparing students for industry. “For example, Bridge Watch students are taken on a number of

field trips to Nanaimo Port Authority, BC Ferries, Canadian Coast Guard and Seaspan in order to gain a clear idea of what being a deckhand looks like at a practical level.”

Location, location, location

Since WMI started in 1989, a strong focus has always been placed on knowing where there is an increased demand for courses and training, and meeting those demands as much as possible. This principle also applies to where courses are taught. “Location should never be a barrier to marine training,” Hough emphasized. “At WMI, we have never limited ourselves by excluding students who can’t attend classes on campus. As such, our courses are offered in communities all over Canada.” With location removed as a barrier, WMI takes the classroom to wherever it is needed and has run courses in places such as Alert Bay, Iqaluit, Hazelton, and Inuvik. Inuvik proved to be a major geographical feat as the instructor negotiated an ice bridge on the way in, and then

Sea by day, home by night

BC Ferries was named one of BC’s top employers for a reason. With a progressive workplace, extensive training and development initiatives, we offer some of the most diverse career opportunities. Come and be a part of a safety focused team, that nurtures innovation while delivering exceptional customer service.

For more information, email hr@bcferries.com

October 2018 — BC Shipping News — 21

SEAFARER TRAINING

Photo courtesy Western Maritime Institute

Enthusiastic WMI students benefit from the many advantages afforded by the private training institute.

...mariners are often more engaged and more likely to be successful with their studies when learning in their own communities. waited for the ice to break in order to take the ferry out again! Hough stressed that “marine safety is so important to what we do … just because someone lives in a remote location, that shouldn’t be a barrier to safe vessel operations.” She observed that mariners are often more engaged and more likely to be successful with their studies when learning in their own communities. “They are close to the vessel in operation and able to immediately relate what they are learning directly to their own marine environment. Remote marine training will always be an integral part of what WMI does.” The Ladysmith campus is able to offer a limited number of students self-contained accommodation in the form of cabins and trailer hook ups. There is a communal room, kitchen and free wifi on campus. Many students commute from Victoria, Parksville, Qualicum, while others rent local accommodation. A new North Surrey campus will open in 2019 to offer courses in the Lower Mainland.

What else sets WMI apart?

Hough is proud of the environment the WMI team have created that enables

22 — BC Shipping News — October 2018

mariners to “complete their studies with minimal disruption to their careers.” Students are keen to complete their studies in a short period of time so they can reduce lost wages, accumulate sea time and get started on the next stages of their career. “WMI helps students achieve academic success without compromising academic excellence by offering an accelerated course schedule with courses running back to back as well as having a longer day in class,” she said. “For example, the 150-tonne Master program is comprised of 11 courses running concurrently from September to March. Students know when the course will end and find it a faster way to study.”

Meeting industry standards

Within the marine training landscape, WMI is regulated by Transport Canada who translates IMO requirements for the Canadian environment into syllabi which is then used as the basis to create courses at WMI. All marine courses taught at WMI are approved by Transport Canada to ensure the content meets Canadian and IMO standards. During the course creation process, WMI submits content to

TC for review and approval. The first time a course is run, a TC Auditor is present to offer suggestions and improvements. Once changes have been implemented, full approval is given for the course to run. TC’s role in course development translates into a key advantage for students as they are permitted to write a Transport Canada-approved exam right on campus.

Industry influence

Once a year, a Program Advisory Council comprised of industry members (ferry operators, union reps, and fishing and tug boat industry representatives) meets to discuss industry developments and help WMI make decisions with course direction and offerings. Equally, WMI will make suggestions and explore ideas with council members. Critical conversations are also held each year at the Canadian Marine Advisory Council forum to discuss education and curriculum for the industry.

New technologies

When it comes to new technology in course content, Hough explained that WMI is taking a two-pronged approach. “Technology is moving very quickly and the digital era is taking over old analogue ways,” she said, “but class curriculum, especially in higher level courses, still covers old analogue methodology, which

SEAFARER TRAINING is then enhanced by digital knowledge.” For example, Chartwork and Pilotage are paper-based and charting implements are still used but students are also taught how to use the technology found on board vessels. “They gain a solid foundation in basic marine skills on the analogue side so that when technology fails, they’ll be able to revert back to a basic foundation of skills taught in the classroom.”

Challenges

When asked about challenges, Hough noted that securing qualified and dedicated instructors is usually top of mind but that WMI is fortunate to have a core group of knowledgeable instructors who foster a culture of continued improvement and who are passionate about teaching the next generation. Another challenge, given the diversity of students, is the varying degrees of educational background. While some left school at 16, others are high school graduates and still others might have some post-graduate or trades training. “A lack of formal education can cause learning difficulties for some students,” Hough said. “To help resolve this issue, in one past Bridge Watch program we introduced an Essential Skills course that helped the students boost their Math and English skills, as well as a Daily Activities component to help students focus and succeed. We also issue a pre-reading primer for our Chartwork and Pilotage students a few months before course commencement to help students connect practical to theoretical work.” For those courses — such as Ship Construction and Stability — that require high-level math, tutors are available for extra help and support. “Another challenge students often find is acquiring enough qualifying sea time to enable them to move up in their career,” said Hough, providing an anecdote from an industry colleague who estimated it is quicker to become a doctor (seven years) than it does to go from being a deckhand to a captain (15-20 years). Hough sees this as a deterrent for ambitious individuals who want to advance their career.

Trends

Many industry round-table discussions are centred on the problem of attracting young people, Indigenous people and

women into the marine industry. Hough believes that ongoing gender disparity in the industry shouldn’t be ignored, especially with an aging baby boomer population leaving the workforce. She pointed out that presently, only 10 per cent of seagoing mariners are female. “Canadian society is changing drastically and our industry needs to change along with it if we are going to sustain our workforce,” Hough said, adding that the Institute is proud to have added two female Master Mariner instructors recently, who are great examples of what women can achieve in the marine industry. When asked about what the industry could do to increase participation, Hough felt greater efforts were required to recruit students as early as Grades 9 through 11. “The industry needs to start thinking outside the box and encourage young people to gain work experience the way many other trades have done. If we don’t get to them early and show them how viable, sustainable and fulfilling a marine career can be, then we’ve lost them for life.” Another trend Hough highlighted is the increase in technological advancement. From autonomous vessels, LNG and alternate fuels to the use of “big data” software to manage vessels and equipment, technology is moving faster than education can keep up. WMI is striving to meet that need with the installation of a Class B simulator, which includes a full mission bridge and four integrated classroom bridges to teach the Simulated Electronic Navigation course at the operational and management level. Hough indicated that further enhancements would be made to build on the existing simulator to meet training needs, becoming a simulator centre for both Canadian and International marine industries.

The WMI advantage

A major advantage for WMI was captured by Hough’s closing comments: “We love what we do and I think that’s reflective in the growth we’ve experienced,” she said. “Students come on campus and see that we have a group of people who not only care about their training but their individual needs and character.” Clearly, this is one of the many keys to WMI’s success as a first-class training institute.

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www.flyissgmt.com October 2018 — BC Shipping News — 23

SUSTAINABLE SHIPPING ‘An Oceanic Awakening’ and SEA20 herald a wake-up call

uests at SMM, the leading international maritime trade fair held in Hamburg, were the first to be alerted to Wärtsilä’s public announcement of ‘An Oceanic Awakening’ — a global initiative focused on the radical transformation of the world’s marine and energy industry into one supremely efficient, ecologically sound and digitally connected ecosystem. Shipping is by far the most costeffective way to move goods and people around the world. As consumer demand increases, maritime businesses are faced with major opportunities to improve operational inefficiencies that impose a significant negative impact on profitability and sustainability. Better port-to-port fuel efficiency, reduced congestion in ports and high traffic areas, the introduction of real-time communication between stakeholders — these issues have become critical to transforming maritime trading today. Highlighting and proactively addressing these issues forms the basis of Wärtsilä’s drive to activate a fully-integrated smart

24 — BC Shipping News — October 2018

New smart technologies will allow vessels and ports to become connected in ways that remain unparalleled in maritime history. ecosystem. A feat requiring collaboration across multiple segments and industry verticals and active involvement in leveraging emerging technologies to create new business opportunities. Key ecosystem players from the world’s most strategically important marine cities have been invited to converge via the newly established SEA20 forum where cross-border dialogue and co-creation are fostered through an ongoing series of events and workshops. At the SMM press conference, Marco Ryan, Chief Digital Officer & Executive Vice President, Wärtsilä Corporation, revealed the corporation’s ambitious aspiration to connect 20 of the most influential marine cities by 2020 into a network that will inspire cooperation as an essential ingredient to driving forward this journey of transformation. The network will support the adoption and deployment

of best practices, embrace digitalisation and legislate new environmentally friendlier, sustainable and smarter ways of doing business across our oceans. Under the auspices of SEA20, an assembly of key influencers from five marine cities have already been brought together to determine how these cities can best take advantage of a Smart Ecosystem and all its cascading benefits to society at large. A creative session held last month in Hamburg, brought together 18 worldrenowned experts from New York, Singapore, Helsinki, Rotterdam and Hamburg. During two days of participatory design, the collective intelligence produced a series of visions explaining how they felt cities of the future could better engage with the ocean. Visions spanning cutting-edge transport provision along urban coastlines, the introduction of marine-centric innovation hubs and the positioning of off-shore smart ports will be used to inspire politicians and the global marine sector to address problems caused by rapid urban growth. A selection of illustrations based on these ideas were on display at SMM along with a film capturing the spirit of this smart, bold movement. In the coming years, the world’s largest means of transportation will undergo a radical transformation. New smart technologies will allow vessels and ports to become connected in ways that remain unparalleled in maritime history. As the result of continuous R&D and strategic acquisitions, Wärtsilä has the most comprehensive and integrated product portfolio in the market — placing the brand in the ideal position to lead this journey of change. “Our solutions have already been addressing sustainability needs in the maritime industries for years,” said Kari Hietanen, Wärtsilä’s Executive Vice President, Corporate Relations and Legal Affairs, “but An Oceanic Awakening demands change on a far wider scale.

SUSTAINABLE SHIPPING It’s time for the world to wake up to the genuinely transformative potential of the marine sector and the role its rapid development will play in each of our lives.” “We simply cannot afford to wait for the marine and energy industries to evolve at their own pace,” said Wärtsilä’s President & CEO Jaakko Eskola. “The calls for greater efficiency, sustainability and connectivity are simply too strong to be ignored. Rapid acceleration to benefit the entire sector, as well as society at large, is urgently required, and ‘An Oceanic Awakening’ is our wake-up call to everyone, heralding the beginning of our journey to making the future of shipping and energy a reality.” Get inspired and involved in ‘An Oceanic Awakening’ and join the SEA20 forum: www.sea20.org.

The Ecotone is a term for the meeting of two natural ecosystems creating a third one. This vision suggests that the SEA20 cities port areas begin housing innovation hubs. These would be dedicated to the piloting of developments that may potentially be realized more fully in the same port or elsewhere following a small-scale test phase. The innovations sketched here range from logistical development to tourism and beyond.

The Mangrove is a new landmark providing a new way to look at the coastline, both literally and metaphorically, and is both self-sufficient and fully powered by renewable energy. The top of the Mangrove also provides a new green space for the city’s visitors and inhabitants. Small vessels and underground tunnels connect the Mangrove to the mainland.

The Blue Belt situates the new “smart port” at a remove from the shore, while the city coastline is given a radical clean-up, ensuring swimmable waters and a new setting for residential and commercial development at the core of the urban environment. As the ports move away from the shore, the coastline can be used for entirely new purposes, bringing an innovative dimension to city life.

October 2018 — BC Shipping News — 25

SUSTAINABLE SHIPPING Changing the face of shipping?

How climate change is posing dramatic challenges to the maritime industry By Michele Acciaro, Trevor Heaver and Jane Lister*

nder mounting industry, government and public pressures, in April, the International Maritime Organization (IMO) reached a landmark decision to commit to reduce Greenhouse Gas (GHG) emissions by 2050 by at least 50 per cent of 2008 emission levels. The decision is the result of the work of the IMO Maritime Environmental Protection Committee (MEPC) and comes following over a decade of discussions among IMO signatory parties. Notwithstanding the opposition of the United States, Russia, Panama and Saudi Arabia, the decision has seen the support of major maritime nations such as China and EU countries and is the most recent and substantial effort of the IMO to address GHG emissions from international shipping. The UN agency started its work on GHG emissions over a decade ago and commissioned three main studies to investigate the contribution of international shipping to climate change, the potential GHG-emission growth pathways and what measures are available to the sector to

reduce emissions. The reports were instrumental in collating evidence together and starting the discussion on policy to reduce emissions from the sector. Estimation of the total GHG emission from shipping is a complex exercise given the fragmented and international nature of the industry. The most recent estimates place the contribution between two and 3.5 per cent of global GHG emissions, an amount equivalent to that of a large industrialized country such as Canada or Germany. The most comprehensive study on the total emissions of the sector is the 3rd IMO GHG Study, published in 2014. The study reviewed published literature and came up with its own estimates which slightly revised downwards the results of the 2nd IMO GHG Study. CO2 emissions from shipping averaged 3.1 per cent of annual global CO2 emissions for the period 2007-2012

however that is considered low due to the corresponding global economic crisis. International shipping, excluding domestic shipping, military and fishing vessels, accounts on average for 2.6 per cent of annual global CO2 emissions for the same period (2007-2012), while CO2e emissions for international shipping, including other GHG such as methane (CH4) and nitrous oxides (N2O), are estimated at an average 2.4 per cent of global emissions, again for the same period. It is important to observe that these estimates are averages and, in the same period, CO2 emissions from shipping and international shipping respectively reached a peak of 3.5 per cent and 2.9 per cent of total yearly emissions. What makes the reduction of emissions particularly urgent is that while other sectors of the economy are likely to bring down the relative weight of total global

Michele Acciaro

Trevor Heaver

Jane Lister

26 â&#x20AC;&#x201D; BC Shipping News â&#x20AC;&#x201D; October 2018

Estimation of the total GHG emission from shipping is a complex exercise given the fragmented and international nature of the industry.

SUSTAINABLE SHIPPING emissions as a result of national targets, the substantial growth of the shipping sector expected for the coming decades might shoot its contribution to over 10 per cent. The 3rd IMO GHG report projects emissions to rise by 2050 between 50 and 250 per cent compared to the 2008 level, while the global effort is to reduce emissions. In 2014, the International Panel on Climate Change suggested the need for a global CO2e reduction in emissions from the 2010 baseline by 2050 in the range of 72 per cent to 41 per cent to be able to maintain global warming below 2 degrees, and even higher reductions by 2100. The IMOâ&#x20AC;&#x2122;s April decision is the most recent in a sequence of policy measures that have been slowly changing the maritime sector, but it is the one that is likely to have the most substantial impact. Already in 2006, the IMO defined a work plan that called for the development of technical and economic measures to curb GHG emissions from the sector. In 2009, it was recognized the technical measures would not be sufficient for an emission reduction that was aligned with the other efforts and international level and this resulted in 2010 in a proposal for a set of marketbased measures. Following the lack of consensus on the adoption of these measures, discussion turned to technical measures, resulting in a comprehensive package of mandatory requirements for all new ships adopted in July 2011. This package is the first mandatory global GHG reduction regime for an entire industry sector. In October 2016, the agency approved a roadmap to 2023 that outlines all necessary steps for the adoption of a comprehensive strategy to reduce emissions. The strategy required the definition of a target, adopted this April that represents the first firm commitment from the IMO for a substantial and sustained GHG emission reduction from the sector. The policy instruments that will have to be adopted by signatory countries in the coming years are still being debated but considering that the required reductions are substantial and ships have an economic life that is counted in decades, a combination of technical, operational and economic incentives will be necessary, as well as, consistent and effective

...considering that the required reductions are substantial and ships have an economic life that is counted in decades, a combination of technical, operational and economic incentives will be necessary... monitoring and enforcement mechanisms. An absolute reduction of emission of at least 50 per cent on 2008 levels in about 30 years will require ships to become progressively more fuel efficient. Substantial hope has been placed on new technologies, as a mixture of renewable energy, such as wind and solar power, coupled with alternative lowemission fuels, such as hydrogen and biofuels and improved technical designs, appear promising avenues for substantial reductions. But even in the most optimistic scenarios, it will take considerable efforts and more than an ambitious target to deliver the desired results. Change is challenged as large portions of the shipping industry operate with little margin and new technologies are expensive and risky. As a result, a change of such

magnitude will likely require restrictive regulatory measures aimed at fasttracking the adoption of new promising technologies. Among the options on the table are: an emission trading scheme that could favour the more energy efficient ships and reward the early adopters of lowemission technologies; and industrywide fuel taxation that could contribute to raising finance for investment in new energy efficient ships by transferring emission costs to the cargo owners. This is generally considered to result only in a marginal overall transport cost increase, although some sectors, such as bulk commodities are going to be affected more heavily and these costs, compounded with other regulatory initiatives, could become substantial.

October 2018 â&#x20AC;&#x201D; BC Shipping News â&#x20AC;&#x201D; 27

SUSTAINABLE SHIPPING The low-emission ship of the future will need to take advantage of all known technologies and will need to cut all inefficiencies, from operations to propulsion and onboard technology. Most likely, the ship of the future will make

28 â&#x20AC;&#x201D; BC Shipping News â&#x20AC;&#x201D; October 2018

extensive use of digital technologies to take advantage of weather patterns and currents, and to minimize human error and optimize operations. But this change will also require adaptation of port infrastructure and hinterland supply chains.

This is not only because these sectors are also under pressure to cut emissions, but also because berthing, loading and unloading and bunkering operations will need to adapt to the new low-emission ship reality. Furthermore, GHG emission reduction is only one of the facets of the overall sustainability spectrum that is changing the industry. Ballast water, spill prevention and waste management are being increasingly regulated and many more, such as underwater noise, soot and ship recycling are gaining global policy attention. The need to further reduce the environmental and social external effects of shipping gives rise to a complex interaction between corporate and public interests. On the one hand, firms need reliable decision support tools for investment and the development and deployment of new technologies and processes. On the other hand, policy-making needs to be supported by rigorous sector and societal analyses of the measures designed to achieve environmental goals so that sound policies can be developed. Ideally, decision support tools and analyses should be developed through the collaboration of all supply chain components of the industry, from ship-owners to operators, to yards, classification societies and cargo owners, with academia, policy experts and lobby groups. It is in recognition of the urgency of such collaboration and of the importance of better understanding how to redefine greener shipping governance that the Social Science and Humanities Research Council of Canada has funded a new sixyear research project led by the University of British Columbia and to which the authors of this article are associated. The project brings together global expertise on sustainable shipping aimed at increasing international collaboration and contributing to the innovative thinking that is required to solve global epochal challenges faced by the shipping industry in the coming three decades. *The authors are respectively Visiting Professor, Professor Emeritus and Associate Director, Centre for Transportation Studies, Sauder School of Business, UBC. Michele Acciaro is also Associate Professor at KĂźhne Logistics University, Hamburg, Germany.

LEGAL AFFAIRS Nobody on deck

The possible future of autonomous ferries

By Glen Krueger, A Vancouver Lawyer with Bernard LLP

magine you’re sitting in line at the Horseshoe Bay Terminal. The announcement for drivers to return to their vehicles has gone out. You wait for the line to move and then, all at once, all the vehicles in your line move in synch. You all have autonomous vehicles that the terminal has wirelessly connected to, moving them as a single unit. You don’t even have to turn the ignition. You board the vessel, which itself is autonomous and can measure to an inch how much space to put between cars, maximizing the number of vehicles per sailing. Think this future is that far off? You might be surprised. In trials organized by the Norwegian University of Science and Technology, a prototype of the world’s first autonomous ferry has been launched. Located in Trondheim, this ferry is shuttling pedestrians and their bikes across 320 feet which takes 60 seconds to cover. The ferry is fully autonomous, self-propelled and is fitted with sensors to avoid other river traffic. It operates largely like an elevator; passengers press a button to call the ferry and it then comes to pick them up. The trial is currently operating a half-scale ferry but a larger 12-person ferry will launch next year which is also emissions-free and will charge its batteries while docked. The designers’ biggest fears are not related to the operational abilities of the ferry but rather that it could be hacked. In coming years, even more autonomous vessels are going to launch. In 2022, the YARA Birkeland will complete the transition from manned operation to fully autonomous operation. It will be the world’s first zero-emission, autonomous container feeder; it will remove more than 100 diesel truck journeys per day from the road. It will sail between three ports in southern Norway with the longest route being 30nm. The distance between Horseshoe Bay and Departure Bay is about 30nm. The benefits are clear. BC Ferries runs numerous routes with little or no change in route so pre-programming is possible.

In trials organized by the Norwegian University of Science and Technology, a prototype of the world’s first autonomous ferry has been launched. Loading and unloading times could be dramatically improved and capacity would be increased per sailing. Reduced costs for fuel consumption and insurance (80 per cent of marine casualties are caused by human error) could result perhaps in even more sailings. This all comes at a time when the public is concerned about costs and wait times. However, as is the case in this world in which technology is quickly outpacing the law, there would be clear legal difficulties. Without a change in regulation, autonomous vessels will still need to satisfy various Transport Canada regulatory requirements. For instance, the Domestic Ferries Security Regulation, SOR/2009-321 (the “DFSR”) was established in order to enhance the security of the Canadian ferry transportation system through the establishment of a framework for detecting security threats and taking preventative measures against security incidents. The DFSR establishes three levels to MARSEC (Marine Security). Each level is designed to establish and communicate the pre-planned responses at various security levels. The three levels are: • MARSEC 1 — the level for which minimum security procedures are maintained as set out in the approved security plan; • MARSEC 2 — the level for which security procedures additional to those of MARSEC 1 are maintained for a limited period because of heightened risk of a security threat or security incident; and • MARSEC 3 — the level for which security procedures additional to those of MARSEC 1 and MARSEC 2 are maintained for a limited period when a security threat or security incident is

probable or imminent, whether or not the specific threat is identified. Each of these levels has aspects set out by the DFSR which likely require human involvement. MARSEC 1 requires that there be a plan for the searching of selected areas before passengers embark, securing all non-passenger areas and at least one of either conducting security patrols or using additional closed-circuit video cameras to monitor passenger areas, vehicles and baggage. At MARSEC 1, domestic ferry facilities are to have plans for methods to prevent unauthorized access to ferry facilities and restricted areas. The requirements of the DFSR increase for MARSEC 2 and 3. At MARSEC 3, steps could include a full or partial search of a ferry or ferry facility, segregation of inbound and outbound cargo as well as ships’ stores, suspension of embarkation or disembarkation activities, evacuation of the ferry or moving of the ferry which may remove it from its usual route. Another aspect of the DFSR which would cause difficulties with autonomous ferries is Section 54: the judgment of the master prevails. This section states that nothing in the DFSR permits any person to constrain the master of a ferry from making or executing a decision that, in the professional judgment of the master, is necessary to maintain the safety and security of the ferry. These decisions could be to deny access to persons and their cargo (subject to some restrictions) or to coordinate crew changes as well as access to the ferry by individuals such as representatives of welfare and labour organizations. Assumed in this authority is that there would be an actual master on board the ferry. Regulatory navigation requirements would also play a role. For instance, October 2018 — BC Shipping News — 29

LEGAL AFFAIRS the Navigation Safety Regulations, SOR/2005-134 set out specific requirements vis-a-vis visibility from the navigating bridge of a vessel. But autonomous vessels do not require visibility. In fact, a large amount of the fuel efficiency comes from the lack of a navigation bridge to begin with. Another potential difficulty with an autonomous ferry is compliance with the Canadian Transportation Agency’s Code of Practice for Ferry Accessibility. This Code contains standards meant to enhance accessibility for individuals with disabilities and establishes what the Canadian Transportation Agency expects of ferry operators. Per Section 5 of the Code, at a minimum, ferry operators must ensure that their employees and contractors are trained in accordance with the Personnel Training for the Assistance of Persons with Disabilities Regulation, SOR/94-42. Autonomous ferries also raise questions about Canada’s compliance with its international obligations such as either the International Convention on Standards of

Training, Certification and Watchkeeping for Seafarers, 1978 (STCW) or the Articles of the International Convention for the Safety of Life at Sea, 1974 (SOLAS). The primary purpose of the STCW is to establish common international standards of training, certification and watchkeeping for seafarers. The SOLAS Convention sets minimum safety standards in the construction, equipment and operation of merchant ships including setting minimum manning levels. Chapter V of the SOLAS Convention requires that vessels be sufficiently and efficiently manned for safety purposes. Section 207 of the Marine Personnel Regulations, SOR/2007-115 enacts this requirement for Canadian vessels and requires various roles be potentially fulfilled including master, chief mate, person in charge of machinery and sufficient numbers required to keep the deck watch, engineering watch and radio watch. What are sufficient numbers? Could the answer, if the vessel is autonomous, be zero? There is an obligation for a vessel’s master to offer assistance to those in

distress and control the use of lifesaving signals. These obligations are impacted by the Navigation Safety Regulations, SOR/2005-134 and the IMO MSC/Circ. 1079 Guidelines on Preparing Plans for Cooperation between Search and Rescue Services and Passenger Ships. Would an onboard AI know whether to offer assistance to a ship in distress and how to comply with the various logistical and legal requirements? How can we ensure compliance with these obligations? This article is just a sample of the legal questions surrounding autonomous ferries. Others could include compliance with provincial occupational health and safety regulations, insurance questions and employment law issues. And of course there are those pesky hackers. However, in this day and age where technology is more and more outstripping our ability to regulate, we need to start thinking carefully about how, in the long term, we will manage changes such as autonomous ferries. Glen Krueger is a maritime lawyer with Bernard LLP and can be reached at krueger@bernardllp.ca.

INTRODUCING OUR NEW PARTNER

Together we bring you • Ultrasonic anti-fouling • Environmentally friendly • Works in salt and fresh water

COME SEE A DEMOSTRATION OF THIS SYSTEM AT CFA jastram.com | jastramtechnologies.com | wagnerengineering.ca

NOVA SCOTIA: +1 902.468.6450| BC:+1 604.988.1111 | ONTARIO: +1 905.641.2587 30 — BC Shipping News — October 2018

TECHNOLOGY

The future of anti-fouling

herever sea, river or estuary water touches a vessel or its internal equipment, biological organisms are at work, colonizing surfaces, clogging pipework, encrusting the hull and propeller, increasing fuel-consumption and causing expensive remedial work. This colonization by algae, weeds and larger organisms like mussels and barnacles increases running costs and, if left untreated, will lead to damage in vital onboard equipment. Current environmental legislation covering the use of poisonous metallic biocides in anti-fouling coatings is tightening and all marine sectors are looking for more effective means of preventing unwanted marine growth on their vessels and inside their equipment. U.K.-based NRG Marine is revolutionizing how commercial vessels tackle marine bio-fouling. Since 2006, NRG Marine has installed over 27,500 of its acclaimed Sonihull Ultrasonic Antifouling systems, making it the world’s leading ultrasonic antifouling specialist.

Driving forces in the commercial sector

“We have experienced a marked expansion in the commercial sector over the last two years,” said Darren Rowlands, Commercial Director of NRG Marine Limited. “Market forces are always driving owners and operators to reduce running costs, extend maintenance schedules and reduce the amount of work required to mothball and reactivate vessels during downtime.” “We usually associate anti-fouling with keeping the outside of the hull clean, to maintain speed and reduce fuel-consumption and fleet-running costs. But in commercial vessels, operators also have to focus on maintaining the efficiency of critical onboard equipment, like box coolers and their associated sea chests, pipework and valves,” explained Dominic Findlow, Technical Director of NRG Marine Limited. “If those become

...all marine sectors are looking for more effective means of preventing unwanted marine growth on their vessels and inside their equipment. clogged with marine bio-fouling, like weeds, mussels and barnacles, the engine cooling systems will start to fail, water pumps become overloaded and the owner can be faced with some very expensive main and auxiliary engine damage.”

Development of larger systems

Last year, NRG Marine launched its first product designed specifically for large commercial anti-fouling applications. “Our naval, patrol and coast guard clients have always been impressed by the performance of our Sonihull Mono and Duo installations, where one or two transducers would be installed to protect performance-critical equipment like a waterjet installation,” said Darren Rowlands. “But, there was growing demand to provide anti-fouling protection to multiple items on the same vessel.” In response to this demand, NRG developed Sonihull8 which has eight independent and programmable outputs and can be linked with up to 32 other units, providing a potential network of up to 256 ultrasonic transducers, enough coverage for even the largest ships.

Fitting and environmental benefits

The Sonihull8 system is much simpler to install than equivalent impressed-current systems which require pressure vessels to be drilled and specially wired with electrically-isolated connections. Ultrasonic transducers are bonded directly to the dry side of the panel, pipe or equipment being protected.

The Sonihull8 system from NRG Marine can reduce maintenance costs by as much as 95 per cent. October 2018 — BC Shipping News — 31

TECHNOLOGY The Sonihull8 system can reduce Capex and lifetime maintenance costs by up to 95 per cent when compared to impressedcurrent systems for protecting internal equipment against marine fouling. Also, there are no costly metallic anodes to replace with the Sonihull8 system so it is low cost and low maintenance with a zero poisonous environmental legacy.

Key features of Sonihull8

Zero environmental impact — No poisonous environmental legacy from biocides or metallic compounds. Zero interference with SONAR arrays or black box recovery equipment. Low maintenance and cost — With no expensive anodes to replace, no specialist fittings, no dry docking or current isolation required, Sonihull8 can save up to 95 per cent of Capex when compared to lifetime costs of other anti-fouling solutions. Microbial control — Suppresses Diesel bug in stored fuel and keeps stored potable water fresher for longer. Independent transducers — Sonihull8 opens the market for large installations, where multiple surfaces and critical equipment can now be protected by one unit. Intelligent multi-material commissioning — Operators can select different resonance algorithms for each ultrasonic transducer to suit the different materials or structures being protected. Can connect up to 80m away — Transducers are impedance matched, enabling cable lengths to be extended to 80 metres with no loss in performance. This makes Sonihull8 suitable for modular pre-fabricated constructions.

A typical Sonihull8 installation protecting a bank of box coolers. 32 — BC Shipping News — October 2018

Fully programmable and integratable — Full RS232/RS422 and ModBus communication interface for wired/wireless remote control with critical-path fault monitoring.

How it works

Sonihull systems produce multiple pulses of ultrasonic energy in a range of targeted frequencies. These pulses are transmitted through the material that the transducers are attached to and it works on any metal or solid composite material like GRP and carbon-fibre. The ultrasound produces a pattern of alternating positive and negative pressure on the surface of the material in contact with water. Microscopic bubbles are created during the negative cycle and are imploded during the positive cycle. This microscopic agitation has a cleansing effect which destroys surface algae. Disrupting this first link in the food chain keeps the surface clean and makes it a much less inviting habitat for larger organisms that feed on the algae. The microscopic movement of water also prevents barnacle and mussel larvae from embedding on the surface.

Fast ferries — a key growth area

“Waterjet applications in high-performance and passenger transport vessels are a key area of operation for Sonihull,” said Findlow. “In these sectors, reducing downtime and increasing MTBO [mean time between overhauls] is crucial for reducing lifetime costs.” In typical waterjet installations, marine growth on the inlet surfaces, impeller housing, shaft, pump blades and nozzle can have a very detrimental impact on efficiency and waterjet performance. Even relatively light fouling can drop top speed by 20 per cent and create a corresponding spike in fuel consumption. “We’ve seen that this surface fouling can also lead to vibration and accelerated mechanical wear in the engines, so anti-fouling becomes a key concern in vessels with waterjets,” Findlow added. “It is awkward and time-consuming to access the internal surfaces of waterjets for regular mechanical cleaning, so a system that removes this requirement is a very attractive proposition for operators.” Traditional self-polishing biocidal coatings struggle to perform in the waterjet environment because they have to cope with two extremes of operation. The coatings have to be active while off-duty, but hard enough not to polish away too quickly in the high-pressure and high-flow environment when the waterjet is running. In recent US Coast Guard waterjet installations, the cleaning and coating regime has been avoided by mounting Sonihull transducers inboard, onto the surface of the jet drive near the impeller housing inspection cover. This location ensures that all the surfaces that are in contact with water get a strong ultrasonic signal transmitted through them. With a full range of surface adaptors, ultrasonic transducers can be mounted to pipes, tanks, pressure vessels and even onto rotating prop-shafts, providing antifouling protection to items outside the hull, like propellers and steering gear. NRG Marine has partnered with Jastram Technologies to offer the Sonihull8 to the Canadian market. For more information, contact Shawn Burchett (sburchett@jastram.com).

CARGO LOGISTICS

Export compliance risks in the supply chain By Darryl Anderson Managing Director, Wave Point Consulting Ltd.

he potential impact of trade wars dominates the headlines. Savvy shippers also know that expanding markets through international trade requires knowledge of and adoption of best practices to address trade issues. Professional organizations such as the Canadian Institute of Traffic and Transportation recognize that the risks associated with compliance failure, even unintentionally, can have grim consequences. For that reason, CITT’s October 2018 Canadian Logistics Conference features a session on the topic of export compliance featuring Kevin Riddell, Director, International Logistics for Tremco Incorporated. Depending on the misbehaviour, exporters can be subject to fines, audits, seizures, inspections, investigations, loss of market access and even imprisonment. This article will focus on ways to address export compliance risks in the supply chain.

Export controls overview

Export Development Canada summarizes trade “compliance” as the process used by companies to observe the laws and regulations that govern its international business operations. Many of these rules are established by national governments to manage their countries’ trade with other nations (such as setting rates of duty), while others are created to fulfill the requirements of international trade agreements. Riddell tells shippers that two key considerations shape the nature of export controls. The Export and Import Permits Act (EIPA) permits the Federal Cabinet to establish the Import Control List (ICL), the Export Control List (ECL), the Area Control List (ACL), and the Automatic Firearms Country Control List (AFCCL). For each one of these lists, the EIPA sets out criteria that govern the inclusion of goods, technologies or countries on the

Depending on the misbehaviour, exporters can be subject to fines, audits, seizures, inspections, investigations, loss of market access and even imprisonment. respective lists. Control over the flow of products and technology contained on these lists or to the specified destinations is affected through the issuance of import or export permits. The Minister of Foreign Affairs and the Minister of International Trade traditionally divide responsibility for the EIPA. Through an exchange of letters, the Minister of Foreign Affairs has asked the Minister of International Trade to take responsibility for import and export controls implemented for economic and trade-related reasons. The Minister of Foreign Affairs retains decision-making authority for controls over military, dual-use and strategic goods and technology, while first seeking the views and recommendations of the Minister of International Trade for specific sensitive applications.

Export Control List

The Borden Ladner Gervais Pocketbook on Canadian Export Controls advises that residents of Canada are not permitted to export certain types of products or technologies, specific products of U.S. origin, to certain destination countries or identified terrorist individuals or groups without first obtaining an export permit. Therefore, a clear understanding of the rules that govern international trade is vital. The Export Control List sets out a variety of items and technologies that require permits for export, regardless of their export destination. The Export Control List is organized into seven groups as follows: • Group 1: Dual-Use List • Group 2: Munitions List

Kevin Riddell, Director, International Logistics, Tremco Incorporated, will be speaking at the CITT Conference in October in Vancouver. • Group 3: Nuclear Non-Proliferation List • Group 4: Nuclear-Related Dual-Use List • Group 5: Miscellaneous Goods • Group 6: Missile Technology Control Regime List • Group 7: Chemical and Biological Weapons Non-Proliferation List Analysis of the export permits issued for both non-strategic and strategic commodities reveals that softwood lumber, clothing/textiles and logs, and munitions, dual-use, and other goods are just some of the most frequent goods covered by the regime. The major international destination of Canadian strategic export permits issues in 2017 was the United States, Europe and Asia. October 2018 — BC Shipping News — 33

CARGO LOGISTICS Riddell stresses the fact that unanticipated events such as the Saudi Arabia/Canada diplomatic row of the summer of 2018 can also test shippers’ export compliance readiness... Drivers of change in export controls

On July 12, 2017, the Government of Canada circulated changes to the Export Control List. The Order came into effect on August 30, 2017. Cyndee Todgham Cherniak founding lawyer of LexSage, a boutique international trade law and sales tax firm, indicated that the ECL Order added new export controls and changed a significant number of existing export controls. Changes were made to all Groups. Additions were made to all but Group 5. The changes to both the Export Control List and the Export Controls Guide do not take place in a vacuum. Key developments in 2017 were legislative amendments to EIPA, the Comprehensive Economic and Trade Agreement and Bill C-47: An Act to amend the Export and Import Permits Act and the Criminal Code (amendments permitting the accession to the Arms Trade Treaty). The changes and additions were also made in response to those consultations and changes to Canada’s international obligations in/with the Wassenaar Agreement (December 2015), Nuclear Suppliers Group (June 2015), Missile Technology Control Regime (October 2015) and Australia Group (June 2015). Riddell stresses the fact that unanticipated events such as the Saudi Arabia/ Canada diplomatic row of the summer of 2018 can also test shippers’ export compliance readiness and a proactive approach to compliance is required.

Export control supply chain best practices

Shippers should undertake an internal export compliance review. Riddell asserts that the internal review should check all the export products being shipped against the Export Control List or whether any of the export destinations are subject to the Area Control List or economic sanctions. “Paying special attention to US origin rule 5400 is important,” said Riddell. Firms should also implement and fine tune their internal export compliance

34 — BC Shipping News — October 2018

program. The program should, amongst other things, have executive buy in, identify an export compliance manager, establish a record-keeping policy, establish an internal audit procedure, set out internal training requirements and confirm the processes relating to export permit applications. Todgham Cherniak stated: “It is important to understand Canada’s export controls and carefully review the additions and changes. The most time-consuming step is a review of one’s exports and transfers to identify controlled goods and technology (including components of products to be exported or transferred). It is not just physical exports (i.e., sending something by courier, ship, air, etc. from Canada to a place outside Canada) that are covered by Canada’s export controls. Transfers, in the form of server access, uploads and downloads (e.g., Dropbox) USB key/DVDs/CD-Roms, emails, telephone conversations, technical assistance and services, etc. are covered by Canada’s export controls. Another step is to update computerized systems to ensure an export permit is obtained before the export or transfer of all controlled goods or technology. Updating compliance policies and programs and educating the critical people in an organization about the changes to Canada’s export controls laws and the compliance program is a vital best practice, according to Todgham Cherniak. It may also be necessary to contact agents and representatives outside Canada (including subsidiaries) to inform them of the changes to Canada’s export controls laws and train them to follow compliance programs. Riddell cautioned that “dual-use” lists contain products and technologies that many companies would not expect to be subject to export controls. Regardless of whether or not products and technologies are sold for military purposes, they may be subject to Canada’s export control regime. Canada controls the export of “dual-use” products and technologies.

Dual-use items include products and technologies associated with a variety of advanced materials, electronics, computers, telecommunications, sensors, lasers, navigation, avionics, marine equipment and technology and propulsion. Examples of dual-use items include software and hardware that use certain types of encryption, optical switches, optical fibre, certain digital video camera technology and “heads-up display” technology. Riddell alerts companies to the fact that Canadian shippers may also need to concern themselves with United States extraterritorial concerns. The U.S. export control legal framework governs not just American exports, but exports of American goods or by American technology. Riddell provided an example of the legal reach of the United States when a Canadian national was sentenced by the U.S. District Court in Seattle to serve 42 months in prison for conspiracy to export restricted goods and technology to Iran on August 20, 2018. If a shipper’s products or technologies are related to advanced materials, encryption, electronics, computers, telecommunications, sensors, lasers, navigation, avionics, marine or propulsion then there is a need to review the Export Control List to determine if their product require an export permit.

Conclusion

Political tensions or significant changes to the Export Control List or Canada’s Export Controls Guide indicate to shippers that it is necessary to anticipate and understand the changes and update systems used to ensure compliance with the Export and Import Permits Act. Riddell also suggests that professional education and networking offered by CITT and others is an essential best practice for managing supply chain export compliance risk because knowledge is the backbone that supports the implementation of all other best practices. Darryl Anderson is a strategy, trade development, logistics and transportation consultant. His blog Shipping Matters focuses on maritime transportation and policy issues.

Logistics Conference 2018

Presented by:

October 24-26, 2018

Pan Pacific Hotel â&#x20AC;˘ Vancouver, BC

www.citt.ca/conference

BLOCKCHAIN

Blockchain and the maritime industry By Georges LaRoche LaRoche Marine Consulting

he 21st century has seen some innovative and amazingly productive technology being introduced and successfully applied to the marine industry, increasing efficiency, safety and improving customer service in ways never seen before. Companies must sit up and pay attention more so today than ever or risk losing their competitive edge on their competitors. Advances in technology such as electronic charts/satellite navigation and A.I.S. (Automated Identification System) have launched the marine industry into an era of increased efficiency and environmental awareness in all the processes. One of the new technologies to present itself is the Blockchain system. Blockchain technology is promising to revolutionize and elevate data recording and sharing to a whole new level, decreasing operating costs by eliminating timewasting issues such as duplication and the problems associated with erroneous data entry. In this article, we will introduce you to Blockchain and explain how this technology will benefit both stakeholders and regulatory organizations. We will demonstrate how ports and shipping companies are now joining the system and how they are to profit from this new venture. Basically, it is said that Blockchain will do for transactions what the Internet did for information.

History

The Blockchain system, developed by IBM, has a Linux form structure which is accessible by everyone, therefore eliminating the costly monopolies often associated with various programs and their creators. Think of it as an operating system, like Windows or IOS (Apple). Where Blockchain was mostly used in the beginning to conduct and record Bitcoin transactions, it has the ability to run several applications. (Bitcoin is a digital currency that was created in 2009 by a person or

36 — BC Shipping News — October 2018

Blockchain technology is promising to revolutionize and elevate data recording and sharing to a whole new level, decreasing operating costs by eliminating time-wasting issues... persons known only by the pseudonym Satoshi Nakamoto.) Blockchain and Hyper Ledger were developed to address the need for an efficient, cost-effective, reliable and protected system for effecting and documenting the financial transactions associated with this new digital currency. It has since been applied to many industries such as the medical community (have you ever tried to chase down medical records?) and many other companies that administer the flow of goods and related disbursements or enable manufacturers to share fabrication logs with original equipment manufacturers (OEMs) and regulators to reduce merchandise recalls and to track shipments.

What is Blockchain and how can it benefit the maritime industry?

With customary processes for recording transactions and tracking related cargoes, participants on a network keep their own books and other records. This traditional method can be costly, mostly because it involves intermediates that charge fees for their services. It can be inefficient, mostly due to delays in implementing agreements and the duplication of effort required to maintain numerous ledgers or record books. Old methods are also sensitive because if a company’s internal system is rendered insecure, due to fraud, cyberattack, or merely a single data entry error, the entire company network is affected. Blockchain provides an efficient and secure platform that virtually eliminates these issues. The Blockchain format gives stakeholders and regulatory bodies the ability to share a ledger that is updated, through peer-to-peer replication, whenever a transaction occurs. Peer

to-peer replication means that each participant (node) in the network acts as both a publisher and a subscriber. Each node can receive or send transactions to other nodes and the data is synchronized across the network as it is entered into the system. Gone are the delays caused by waiting for secondary data entry or inspection of records. Duplication is eliminated as the original entry is visible instantly to all interested or authorized parties. Transaction periods for complicated, multi-party interactions are cut from days and weeks to simply minutes. Contract resolution is much quicker, because it doesn’t require delays waiting for authorization by any main authorities or regulatory organizations. It will also allow some audits to be conducted at a desk and computer, as the auditor has all the required information concerning the port or vessel directly in front of her/him. Blockchain technology is now active in tracking container shipments but will soon be applied to the full range of cargoes being carried globally. So, what is Blockchain? The name “Blockchain” stems from the method it uses to store transaction information or data. The Blockchain system is organized in blocks that are linked together to form a chain. Various stakeholders become participants and as the amount of transactions increase, so does the size of the blockchain. Blocks record and confirm the time, information and sequence of transactions, which are then entered into the Blockchain through a “Shared Ledger” within a discrete network governed by parameters agreed on by the network participants in a series of individualized “Smart Contracts.”

BLOCKCHAIN Each block contains a hash (a digital identification mark), timestamped groups of new authentic transactions, and the hash of the previous block. The previous block hash connects the blocks in a chain and inhibits any block from being altered or any blocks being created between any two current blocks. Subsequently, each block reinforces the validity of the previous block and therefore, the entire blockchain. This system renders the entire chain incorruptible, giving it the essential element of inalterability and secure entry. All Network Participants create parameters of data viewing and entry within a Smart Contract, thus retaining sensitive information confidential and available on a “Need to Know” basis in the Shared Ledger. A Shared Ledger is created and updated as required by the various network participants, making information instantly available to all concerned parties. Blockchain reduces the need for re-entry and duplication of data. It is extremely difficult to make any changes once information is entered into the Ledger, thus reducing any confusion or errors and greatly increasing cyber security. As data is entered by any of the participants into the Shared Ledger, it becomes instantly available to all authorized parties. Recognizing the key business benefits for business, blockchain has the following specific benefits: • Time savings: Transaction times for complex, multi-party interactions are slashed from days to minutes. Transaction settlement is faster, because it doesn’t require verification by a central authority. • Cost savings: A blockchain network reduces expenses in several ways: • Less oversight is needed because the network is supervised by network participants, all of whom are known on the network. • Intermediaries are reduced because participants can exchange items of value directly. • Duplication of effort is eliminated because all participants have access to the shared ledger. • Tighter security: Blockchain’s security features protect against tampering, fraud and cybercrime. If a network is permissioned, it enables the creation of a members-only network with proof

Blockchain’s security features protect against tampering, fraud and cybercrime. If a network is permissioned, it enables the creation of a members-only network... that members are who they say they are and that goods or assets traded are exactly as represented. Not all blockchains are built for business. Some are permissioned while others aren’t. A permissioned network is critical for a blockchain for business, especially within a regulated industry. It offers: • Enhanced privacy: Using IDs and permissions, users can specify which transaction details they want other participants to be permitted to view. Permissions can be expanded for special users, such as auditors, who may need access to more transaction detail. • Improved auditability: Having a shared ledger that serves as a sole source of truth improves the ability to monitor and audit transactions. • Increased operational efficiency: Pure digitization of assets streamlines transfer of ownership, so transactions can be conducted at a speed more in line with the pace of doing business. Source: IBM

How is Blockchain being applied today in the marine industry?

Maersk and IBM have recently joined in a venture to create a global system called “TradeLens,” a Blockchain shipping

program that has been designed to promote more efficient and secure global trade. IBM and Maersk have announced that over 94 organizations are, or have agreed to participate in Trade Lens, including several port and terminal operators worldwide. Participants in the TradeLens platform include the Ports of Rotterdam and Halifax, as well as numerous container terminal operators and container carriers including Pacific International Lines (PIL) and Hamburg Süd. Nations such as Peru, Singapore, Australia and the Netherlands also presently have their Customs Authorities involved in TradeLens, thus rapidly increasing data flow as well as reducing arrival and departure delays. B.C. Ferries has begun using a blockchain system in its crew hiring and training and processes, making any entries or changes to a crew member’s certification or training instantly visible to all concerned participants within the network. William D. Friedman, President and CEO of the Port of Cleveland/Cuyahoga, a major Great Lakes port, recently announced that the Port has begun its own Blockchain implementation to provide increased efficiency and customer service within its system. In fact, the entire city structure is planning to incorporate the Blockchain system, not only in port and

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BLOCKCHAIN cargo logistics, but in several other sectors such as the medical community and all manners of city-wide certification. The City of Cleveland is furiously planning to host its first Blockchain conference, named Solutions, at the Huntington Convention Center from December 1 to December 4, 2018. The “Solutions” concept also has the full backing of auto magnate, Bernie Moreno’s Blockland Group, which also includes David Gilbert, CEO of Destination Cleveland. In short, Blockchain systems are being implemented at a rapid rate in many facets of the marine sector and amongst many other industries as well, such as the

manufacturing, pharmaceutical, medical and automotive sectors.

Conclusion

It is very evident that traditional shipping technology and operations are changing exponentially in this century. Electronic charts and satellite navigation, autonomous operation of vessels, clean fuel propulsion and of course Blockchain are either in place now or being implemented worldwide and are pushing the port and ship operators to either adapt now or in the near future, or fall in the wake of global and domestic trade which can prove to be quite competitive in these times.

The shipping industry, especially locally in North America has made many changes over the last 30 years to continue to make it a viable and cost-effective way to move cargo. New developments in technology are arriving at an accelerated rate now as many breakthroughs have occurred in the last 10 or 20 years. Companies and ports would serve themselves well to stay up to date and listen carefully to evolving ideas in the sector as they are quickly becoming functional options and are presenting a definite competitive edge over those who choose to remain with the traditional operating methods, rather than be open to new methods and technology.

Marine Blockchain network sample 1. Shipyard fabricates Newbuild, Regulators issue Class, Certificates, etc. 2. Ship owner can monitor the construction and certification process. 3. Once ship owner takes delivery of vessel, then the charters/ship operators can see the change in inventory and current information concerning the new vessel (capacity, type, speed, etc.). Some of this information also becomes available to the cargo vendors and buyers and terminal operators. 4. Once a cargo has been purchased, the information is automatically shared with the ship owner, terminal operators and other interested parties. The parties then select a vessel and trip information can be entered and updated into the ledger as needed throughout the voyage. 5. Port arrival information is also shared automatically with the concerned government and regulatory parties concerning the vessels voyage and port entry (e.g., customs, inspectors, environmental regulators and monitoring organizations). 6. The voyage information is similarly shared with various service providers required by the vessel in port or otherwise. (e.g., 38 — BC Shipping News — October 2018

pilotage, towing services, ship repair, chandlers, crewing departments/ agencies, agents). 7. As various entries are made throughout the voyage or otherwise, the information becomes readily available to all interested participants. For example, a crew member upgrades his/her certification and the information is entered by the certifying organization and is now available to the shipping company.

Another example would be if a vessel has changes or repairs made during the voyage. Once work is completed, all pertinent data, invoices and certification are updated for all network participants that are designated to have this information. 8. Once the ship is sold or scrapped, the information is entered into the Shared Ledger, allocating the data to all relevant participants (e.g., regulatory bodies, charterers, etc.)

SHIPPING AND FINANCE

Insights into commercial banking

f you were looking for a positive sign on the growth of B.C.’s shipping industry, look no further than TD Business Banking. “We’ve always been interested in the industry,” said Vice President of Commercial National Accounts, Steven Mo, “but the activity we’re seeing currently from both existing and potential clients is very dynamic and growing.” In an exclusive interview with Mo, BC Shipping News was given an inside look at key factors within commercial banking that play a role in the business-to-bank relationship and lending decisions.

Background

Steven Mo is not a career banker. In fact, his original training was as an engineer, obtaining his degree from the University of Waterloo and his Masters from the University of Toronto. He spent much of the 1990s specializing in environmental site assessments but made his first career change late in the decade, moving into construction engineering which saw him assist with the design and construction of civil infrastructure for mines in B.C. and around the world. The early 2000s were pivotal years for Mo — in 2000, he started the MBA program at the University of British Columbia, majoring in Finance. In 2002, he joined TD’s commercial banking team in Vancouver where he held a variety of positions, working his way up to relationship manager based in Toronto, “In that role, I was representing my clients to the bank — it was my job to tell their story as it relates to establishing themselves, building the relationship and having their financial needs met.” Another experience-building position for Mo was at JP Morgan from 2007 to 2009. “It was one of the most volatile periods in the financial market and to a certain extent JP Morgan was at the epicentre when Bear Stearns failed. Working at an Investment Bank was not sustainable from a work-life balance perspective,” he said, adding that he and his wife jumped at the opportunity to return to the West Coast. Rejoining TD, Mo first managed the Mid-Market Sales team in the Fraser Valley before moving on to other positions,

TD’s Andrew Kostiw, Director, Treasury Management Pacific Region and Steven Mo, Vice President, Commercial National Accounts provided insights into commercial lending at a recent shipping industry luncheon.

“This is a relationship business ... Ultimately, the key is communication. You generally want to operate in a world of no surprises...” and ultimately becoming an executive in 2012. Mo assumed his current role in 2015 leading the B.C. team. At the Commercial National Accounts here in Vancouver, Mo and his full service team of nine manage loans and financial instruments starting at $25 million providing analysis, underwriting, origination, servicing, administration and adjudication under a standalone profit and loss centre — essentially running a business within a business with relative autonomy. “In contrast to some other banks that look at the account from a revenue perspective, we look at it from the borrowing or lending perspective,” he said, explaining that loans under $25 million fall into the mid-market segment of commercial banking. When asked about the upper limit for a single bank deal, Mo noted that while it can reach into the hundreds of millions for a very well-rated entity, it was more likely that anything

over $50 million would involve multiple banks depending on the credit risk profile. “We’ll work with our client to facilitate the process. They might already have an existing relationship with another bank or it could be a complete syndication so we’ll end up managing the bankto-bank relationships on behalf of our client and in this way, the business can focus on what they do best: manage their business vs managing a group of banks.”

The three Cs of lending

“This is a relationship business,” Mo said when asked about factors considered in making a commercial loan. “Every deal is unique and fully customized for loan instruments, financial covenants, rates and terms of payback. Ultimately, the key is communication. You generally want to operate in a world of no surprises. It’s better to be up front about bad news rather than hold it back. Good news should also October 2018 — BC Shipping News — 39

SHIPPING AND FINANCE At the end of the day, Mo estimated that, while reliance on financial statements and information will drive pricing (e.g., interest rates), evaluations of management and the industry will also be a significant driver. be shared expeditiously. It’s almost like a marriage.” Mo went on to note how the communication aspect speaks to management’s character and credibility. “There are a lot of numbers involved in banking,” he said. “While I can look at financial statements and assess a business’ creditworthiness, I can also ask four or five tailored qualitative questions to provide a strong sense of the financial situation of the company without even seeing the numbers: what is the industry? What is your competitive advantage? How many years have you been in business? What is your experience? It’s all about assessing the character of management and the vibe you get from them. There is a science to it — yes, absolutely, we have models that spit out a number — but there is art to the science. A

40 — BC Shipping News — October 2018

lot of information comes through building the relationship.” At the end of the day, Mo estimated that, while reliance on financial statements and information will drive pricing (e.g., interest rates), evaluations of management and the industry will also be a significant driver. Referring back to the marriage analogy, Mo says that “when we make a decision, we’ve made that decision for the long term — generally through thick and thin. Part of the decision is based on science (i.e., the financial statements) but we look at other aspects — ownership, management, the quality of staff, etc. There are a lot of different factors, but the most integral pervasive factor is communication.” Taking the marriage analogy one step further, Mo notes that the odd case ends up in divorce. “Sometimes you just

can’t reconcile and for long-term relationship reasons, it’s best for both businesses to move on.” Summing up how Mo and his team will make a decision from a lending perspective, he cited the “three Cs of lending: character, capacity and collateral. Character assesses the strength of the management; capacity tells us about the cash flow and the ability of the business to repay the loan; and collateral is the ‘rainy day’ fund that rounds out the financial picture,” adding that capacity or cash flow are the main consideration because that is how loans are repaid. Moving beyond the decision, the next step for the Commercial National Accounts Group is to work with the business to determine the best financing solutions for them. “Options can range from revolving lines of credit, mortgages, short to long-term loans, cash management or even derivative facilities,” Mo said. “Each situation is unique and solutions must be tailored to the business’ needs. We’ll also bring in third-party specialists — marine appraiser, structural engineers, real estate

SHIPPING AND FINANCE appraisers, lawyers, etc. — to help with due diligence.” The question that is most often asked in banking is: what is the interest rate? Major factors that drive the rate include the probability of default and security. “Loans fully secured by hard, tangible assets like inventory or accounts receivable generally garner a better interest rate than those secured by the cash flow-generating capacity of the business,” Mo said while explaining the formula to come up with a competitive rate. Those companies that consistently grow, maintain liquidity and manage their debt while continuing to invest in their business will also be able to negotiate a better interest rate.

Supporting the marine industry

As noted previously, Mo and TD’s Commercial National Accounts Group has shown strong support for the marine industry. In addition to exposure in industries like food and beverage and long-term care, the group has significant marine exposure — ships in the water,

terminals and ports. “It’s a growing industry throughout the province. Prince Rupert Port, for example, is well-positioned for access to the U.S. mid-west and the movement of goods to and from Asia. And the Port of Vancouver has major growth plans,” he said, adding that Vancouver Island is also a source of keen interest for his group. From a marine perspective, Mo described the services he and his team offer as a “financial supermarket.” Whether the requirement is for a revolving loan, a construction loan (i.e., an interim loan to complete a construction project and then, at the end of that period, payback is made over a determined period of time) or even foreign exchange, Mo sees the potential for TD to assist. “Marine businesses will often require large capital expenditure loans to cover expansions or the acquisition of equipment. From a banking perspective, our experience with this type of financing serves us well,” referring to both his experience with existing clients as well as his engineering background that

provides for greater understanding of the goals of an industrial company. Mo also sees initiatives like the Vancouver International Maritime Centre as having a major influence on their support. “We have seen a trend of head offices exiting Vancouver in a number of industries and the VIMC is addressing that issue for the marine industry.”

More than just numbers

Contrary to popular belief and as the above interview highlights, intuition and relationship development are significant factors in the decision-making process for lending. “I really can’t stress enough how important it is to develop a working relationship that is based on communication, transparency and trust for both parties,” Mo said. “For us here in Commercial National Accounts, our collective knowledge and experience with both the financing side and the marine business side allow us to work very well with clients to identify the financing instruments that will serve their needs best. It isn’t always just about the numbers.” BCSN

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SHIPPING

Vancouver welcomes China Navigation Co

n early August, the China Navigation Company (CNCo) celebrated the opening of their branch office in Vancouver. In choosing Vancouver as the location to expand their North American presence, CNCo has highlighted the growing awareness of this city as an international shipping hub. “It’s a thriving shipping community,” said Chris Daniells, CNCo’s Commercial Director. “It has all of the key factors to be a first-class maritime hub … and just look at that view.” Daniells, along with Rob Aarvold, General Manager, Swire Bulk, sat down with BC Shipping News recently to discuss the new Vancouver office and how it fits into CNCo’s worldwide operations.

Background

As part of the Swire Group (the 202-year-old conglomerate of businesses that includes the likes of Cathay Pacific, Coca-Cola and many, many others), the China Navigation Company was established in 1872. Originally trading on China’s Yangtze River, CNCo expanded operations, first, along the China coast and then later, operating regular multipurpose liner services to Australia and New Zealand. Throughout the 20 th century, the company continued to expand both its fleet and areas of operation. Traditionally having served the Asia-Pacific region under Swire Shipping, CNCo set up a handysize dry bulk trading business in 2010/2011, and in 2012, established Swire Bulk. The company was then segregated into three main divisions: Swire Shipping, with a focus on liner shipping services; Swire Bulk, to manage a total of 90 ships including owned, long-term and short-term charters; and Swire Bulk Logistics, providing value-added services to assist with a customer’s logistics supply chain (for example, working with mining companies or raw material suppliers to find solutions to bottlenecks or inefficiencies). Today, CNCo owns and operates about 135 vessels consisting mainly of handysize and supramax dry bulk 42 — BC Shipping News — October 2018

Graham Clark (VIMC), the Honourable Bruce Ralston (BC Minister Jobs Trade, and Technology), Chris Daniells and Bernard Huizenga (Swire) officially open the CNCo Vancouver office.

In choosing Vancouver as the location to expand their North American presence, CNCo has highlighted the growing awareness of this city as an international shipping hub. carriers and multi-purpose liner vessels. Headquartered in Singapore, CNCo now operates in 16 countries including Canada. Taking a long-term view of growing its business, since 2013, CNCo has undertaken a newbuilding program comprising 61 modern and fuel-efficient handysize bulk carriers, multi-purpose vessels and one cement carrier.

Why Vancouver?

With ever increasing activity on the West Coast, the decision to set up a presence closer to the Canadian market was a few years in the making. “We’ve been operating on the West Coast for about 15 years under a liner service agency agreement with Montship Inc.” said Daniells. “With Swire Bulk getting 90 ships in the water, we felt it was the right time. The West Coast/North Pacific is the biggest trade lane when it comes to minor bulks and if we want to continue to grow the business — and grow successfully — we need local teams in the market.” Operating mainly handymax with some supra and ultramax vessels, Swire

Bulk sees about 20 to 25 ships per month sailing along the West Coast from Alaska to South America. Volumes have been doubling year over year since being established in 2012. Aarvold noted that the entire West Coast will be run out of the Vancouver office. “The decision making is here,” he said. “Local partners — lawyers, financial advisors, etc. — are used for local contracts. We also work very closely with local service providers like Western Stevedoring and Tidal Transport. It’s very much a Vancouver operation.” Indeed, the new office, with 14 managers overseeing the dry bulk and liner businesses under its Swire Bulk and Swire Shipping divisions, is the largest CNCo office in North America (Swire Bulk also maintains an office in Miami, Florida, as well as a presence in San Francisco). When asked about the decision-making process, both Daniells and Aarvold were quick to sing the praises of the Vancouver International Maritime Centre. “We met Graham Clarke and Kaity ArsoniadisStein and the VIMC team in 2016. They

SHIPPING made it easy for us,” said Daniells. “Setting up a branch office in any country will always come with some challenges and the VIMC not only highlighted the benefits of Vancouver, they were also of great assistance in helping us set up in terms of work permits and connecting us with key contacts here in Vancouver. They sold it well.” “Through our global network, we connected with CNCo’s Managing Director James Woodrow and his team in Singapore during Singapore Maritime Week 2016 and have since been working with them closely to inform their decision to set up an office in Canada,” said Graham Clarke, VIMC’s Founding Chairman. “By building a maritime hub that brings together products, companies and expert services, Canada will gain the advantage of the resulting relationships, synergies and high-level jobs creation. We look forward to increasing the economies of scale by attracting more shipping companies, like CNCo to Vancouver.” Kaity Arsoniadis-Stein, VIMC’s Executive Director, added: “Canada is known for its strong modern economy, universal healthcare system, stable political environment, world-leading banks, high-caliber business support services, high-tech capacity as well as easy access to capital markets in North America. We are thrilled to be welcoming CNCo to Vancouver and we are committed to continuing to assist them as they grow their operations in Vancouver.” In addition to VIMC, both the B.C. Government and the Federal Government were highly supportive in bringing CNCo to Vancouver. “We welcome The China Navigation Company to Vancouver and look forward to their continued success as they expand globally. The shipping industry provides nearly 12,000 people with good jobs up and down the B.C. coast. By continuing to build a strong maritime sector in British Columbia, our government is helping to create sustainable jobs and provide opportunities for businesses, like The China Navigation Company, to grow here in B.C. and reach new markets around the world,” said the Honourable Bruce Ralston, Minister of Jobs, Trade and Technology, who was on hand at the opening ceremony.

Swire’s CNCo representatives Bernard Huizenga, Chris Daniells and Rob Aarvold. The Honourable Jim Carr, Minster of International Trade Diversification, while not able to attend in person, sent a message of congratulations and further noted:

“There has never been a better time to invest in Canada. The China Navigation Company’s new Vancouver office is yet another example of success in attracting

Steven Mo, Vice-President (steven.mo@td.com) Andrew Kostiw, Director (andrew.kostiw@td.com)

October 2018 — BC Shipping News — 43

SHIPPING “Our strategic objectives are very much aligned with what we see in Vancouver in terms of commitment to the environment and sustainability.” international businesses to this country, recognizing unparalleled innovation and providing fresh capital. Trade and investment with overseas partners is essential if we are to encourage long-term prosperity and an economy that creates jobs for the middle class.”

Common values

“The Swire Group is always looking at their long-term strategic goals,” said Daniells. “Our strategic objectives are very much aligned with what we see in Vancouver in terms of commitment to the environment and sustainability.” To that end, CNCo has one of the youngest dry bulk fleets in the world with an average age of 2.5 to three years. “Because of the young age of our vessels and noting we still have 10 ships on the dry bulk side on order, we are already ahead in terms

of meeting the Ballast Water Management Convention as well as upcoming low sulphur fuel regulations. As a company, we recognize that it’s the right thing to do and we are always striving to be a market leader when it comes to environmental initiatives.” Undeniably, CNCo has an impressive track record when it comes to addressing environmental sustainability issues, for example: CNCo engaged MarorkaTM to provide data-driven energy management and operational performance solutions. By measuring variables like vessel speed, propulsion performance and fuel consumption and using those figures to set science-based targets, CNCo’s Energy Efficiency Operational Indicator (EEOI) has seen a steady decrease of CO2 emissions.

Swire Group’s Argent Energy has developed a drop-in replacement Bio Fuel Oil (BFO) derived entirely from waste-based sources for the IFO/HFO usually used in marine slow-speed 2-stroke diesel main engines. Research and development using CNCo vessels has been ongoing since 2015 with good performance results. CNCo “green recycled” a total of eight vessels between 2012 and 2017 in China and India. The initiative is in keeping with CNCo’s core principles that support the IMO and industry efforts to raise the standards of ship-recycling facilities to eliminate lost time injuries and environmental pollution incidents. Additional initiatives can be found throughout CNCo’s operations: providing empty containers and ocean freight carriage to 26 Pacific Island Countries and Territories to remove recyclables from the islands; using more sustainable shipping containers that use water-based paint and bamboo flooring instead of environmentally damaging zinc-based solvent paints and wood from unsustainably managed

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SHIPPING forests; and a number of community projects including aid to victims of natural disasters.

Moving forward

According to Robert Heal, General Manager, Swire Bulk West Coast Americas, CNCo’s Vancouver office will be focusing on four main sectors: dry bulk handysize, supra/ultramax and parcelling as well as a bulk/break bulk container liner service from the West Coast to Australia and New Zealand servicing their client base operating in the Americas. Regionally, the office will cover the entire West Coast from Chile to Alaska. Rob Aarvold noted that the Vancouver office has a diverse and experienced team of specialists. “Bernard Huizenga, for example, has significant practical experience in the break bulk sector, while Tom Days focuses on sulphur and with our open office layout, the communication amongst the team provides for a higher level of service where they can assist each other according to their area of expertise.” While there is no magic number, both Daniells and Aarvold expect CNCo’s activities in Vancouver will continue to grow. They did note however that there are current limitations with port facilities that may present challenges for Vancouver in the future. “Space availability, especially for project cargoes and break bulk volumes is already at capacity and choice is limited. There will be challenges as global trade continues to grow,” said Daniells, “but we’re looking at solutions and are working with existing providers to find ways around that.” With an expected 150 ships in the CNCo fleet by the end of 2019, Daniells expects that growth on the West Coast will be in parallel to that. Aarvold added that growing the West Coast volumes from 20 vessels to 30 or 35 would be a good reflection of their growth strategy, further noting that the current trade wars have the ability to generate new opportunities. “Trade wars create inefficiencies,” he said. “Instead of buying from local partners, we have seen new trade flows with cargoes emanating from ports farther away which require more sea days and so increase the ton/mile ratio.” BCSN

Robert Heal, General Manager, Swire Bulk West Coast Americas.

Graham Clarke and Kaity Arsoniadis-Stein, Vancouver International Maritime Centre, were of great assistance to Swire throughout the set up of the new office.

Peter Xotta (Vancouver Fraser Port Authority), Ron Brinkhurst (Tidal Transport) with CNCo staff Freddy Campana, Dan Chen and Alex Yan. October 2018 — BC Shipping News — 45

BUNKERING

Suncor introduces ship-to-ship fuelling to the Port of Vancouver

little under three years ago, Suncor began looking into opportunities for their West Coast facilities. “The marine industry was top of mind,” said Patrick Ritchie, General Manager, wholesale sales and site operations, Suncor. When describing the decision to enter into the bunkering service for foreign-flagged vessels visiting B.C.’s West Coast. “We started off with truckto-vessel deliveries in February 2016 and quickly realized there was high demand and room in the market to offer another bunkering option to vessel owners and operators.” However, the Suncor team didn’t want to simply duplicate existing services. “We wanted to provide a safe, reliable improvement over what was currently in

46 — BC Shipping News — October 2018

“We ... quickly realized there was high demand and room in the market to offer another bunkering option to vessel owners and operators.” the market,” he said. Canship Ugland Ltd. and the CL Aquarius were brought in to provide the Port of Vancouver’s first fuelling service by tanker.

Background

Tracing its roots back to as early as 1917, Suncor has grown to become Canada’s leading integrated energy company. From mining, exploration and production, to refining and finally to retail under the Petro-Canada brand, Suncor has a nameplate production capacity of about 940,000 barrels per day. They have

four distribution terminals in British Columbia: Burrard, Nanaimo, Kamloops and Terrace, supplying a variety of fuel products to customers throughout B.C. and internationally. The Burrard Terminal, with three separate facility locations in both Port Moody and Burnaby, has been distributing fuel since the 1920s and today, distributes over three billion litres of fuel per year via pipeline, marine tankers, trucks and rail. With the longstanding, successful business relationship with Canship Ugland

BUNKERING Ltd. on the East Coast, Suncor saw the ship management company as a great fit in having them involved in the bunkering operations on the West Coast. A Canadian company — with Canadian crew and Canadian-flagged vessels — Canship Ugland Ltd. is a joint venture between J.J. Ugland Companies of Grimstad, Norway, and Knutsen OAS Shipping of Haugesund, Norway. They provide technical and crew management for a variety of vessels, including dynamically positioned crude oil shuttle tankers, product/chemical tankers, ice-breaking bulk carriers, multi-purpose offshore vessels, tractor tugs and pilot launches. The company has, over the years, been involved in providing technical and marine crew to OSVs, AHTS, Seimic, Cable Layers and FPSOs. Safety of life and protection of the environment are the top priorities for Canship Ugland. During 21 years of tanker operations Canship has not had a single cargo-related release to sea originating from their vessels.

Companies International Marine Forum’s Ship Inspection Report Programme) and Transport Canada, while under-tonnage vessels are not required to meet the same standards. • In addition to requirements for Safety Management Systems, vessel age restrictions and regular tanker management and self-assessment audits which are not required for tugs, the CL Aquarius has a 330 per cent better power to weight ratio than the typical tug/barge combination (i.e., a 1,000HP tug pushing a 4,0000-ton barge versus 2,600 HP plus a 400HP thruster carrying 3600 tons of cargo).

Fuelling operations

The CL Aquarius arrived in Vancouver in June this year, following upgrades to

the 10-year-old vessel at the Yardimci Ship yard, Tuzla in Turkey. With 10 cargo tanks (4,326 cubic metres) and one slop tank (125.9 cbm), the CL Aquarius is currently providing marine gas oil deliveries up and down the B.C. coast. “This ship provides us with the opportunity to go to Vancouver Island, the Gulf Islands, English Bay and the Inner Harbour as well as all the way up to Prince Rupert,” said Ritchie. “Currently, our area of operation is predominantly the Inner Harbour, English Bay and the Gulf Islands.” With the ability to supply vessels of 275 metres in length and up, Ritchie said the option of “going to the ship” is appealing for those ship owners and agents with a vessel anchored in English Bay. “Ships in the Bay that are waiting for a berth no longer need to come

Tanker versus tug and barge

In North America, bunkering is traditionally done by tug and barge; globally however it’s more common to see self-propelled fuel vessel. “They have better manoeuvrability, more redundancies such as additional crew, engines and mechanical safety features and can operate 24 hours a day,” explained Ritchie. In fact, there are many benefits to fuelling by a self-propelled vessel versus tug and barge: • Where a barge is towed with limited control and high risk in adverse weather, the CL Aquarius tanker is highly manoeuvrable with twin CP propellers, forward thrusters, twin independent rudders and full control even in the most adverse weather condition. • While tugs are manned by a twoman crew, the CL Aquarius has a full complement of qualified crew, all fully trained in industry regulations and best practice guides for ship-to-ship bunkering operations as well as high competency requirements for specific ship handling, pollution prevention, etc. • The vessel itself is fully inspected and classed by ABS, SIRE (the Oil October 2018 — BC Shipping News — 47

BUNKERING into the Inner Harbour for fuel and then return to anchor,” he said, adding that they are also able to provide verifications for the sulphur content of the fuel. “We make the product, so we are able to provide greater confidence in the make-up and its ability to meet current requirements.” Ritchie also noted that they are in the process of adding intermediate fuel oil (IFO). “While this IFO isn’t a Suncor product, we are able to carry both MGO and IFO, so we are looking into this in order to meet our customer’s needs,” he said.

Forward looking

The company will continue to look at different options for the future but for now, the focus will in the Vancouver market will remain with the CL Aquarius. “Our main goal was to enter this market with a safe, reliable option for our customers. With a Canadian-flagged vessel, a Canadian crew and Canadian product, as well as an experienced marine department that has been dealing with chartered tankers for many, many years, we feel we’ve brought a real value-add service to the industry.”

Photo: Robert Etchell

CL Aquarius specs • • • • • • •

Double Hull / Double bottom LOA: 90.5 metres / Breadth: 14.6m / Draft: 7.66m (summer draft: 5.4m) Speed: 11.6 knots at 85% MCR Main Engine: 2 X 960 KW MAN B&W DIESEL 6L23 / 30A AT 900 RPM Shaft Generator: 2 X 700 KW LEROY SOMER Auxiliary Engines: 1 X 280 KW 1800 RPM VOLVO PENTA TAMD 103ª Emergency Diesel Generator: 1 X 175 KW 1800 RPM VOLVO PENTA TAMD 74A EME • Bow Thruster: ROLLS ROYCE 300 KW. ELECTRIC MOTOR DRIVEN • Inert Gas: Nitrogen generator- N2 Safety B.V. 1500 m3/hr • Propeller: 2 X 4 blades VB640

Additional features:

• Remote emergency shutdown • Capability to carry out cargo operations from the Stern manifold as well amidship manifolds (port and starboard) • Emerson micro motion Coriolis flow meters are used for calculation quantity of product transferred. This is a highly accurate fully certified and calibrated flow meter which measures mass and density by calculating the difference in the Sine waves created by oscillating tubes inside the unit. The volume is derived by the calculated mass and density of the product. This eliminates the need of manual measurements of cargo tank volumes pre and post fuelling operations. Data can be printed out at the end of the operations. • Large Yokohama fenders 48 — BC Shipping News — October 2018

MULTI-PURPOSE VESSELS Q&A

Canada’s multi-purpose vessel market

iven the current climate of trade tarriffs, BC Shipping News turned to AAL’s Commercial Manager for Canada, Marc Schutzbier, to get an understanding of the impact on the multipurpose vessel market specifically related to Canada’s West Coast. As readers will quickly realize, Schutzbier’s knowledge and expertise on the market provides for a very informative interview. BCSN: What are the main disruptors or challenges currently for the Canadian MPV market? MS: The main challenge we see in the Canadian MPV market is a combination of a weak cargo inbound/outbound stream and shippers who have become used to a very low rate environment because of overcapacity of vessels — rates which are unsustainable for MPV carriers. The market is not yet ready to support higher rate levels despite the timid increase in general/project cargoes on the inbound trade. In our segment, MPV carriers seek to achieve a good result on both the front and back haul, but it has become more and more challenging to maintain the profitability on the front haul (i.e., inbound voyage) which is traditionally the stronger voyage.

BCSN: How is AAL dealing with these challenges? MS: AAL has been serving the Canadian market for years with the well-established and successful Pacific Liner Service. In light of the above challenges and current market situation, AAL made the decision to transform the Pacific Liner Service from a regular liner service into a Semi-Liner Service, hence creating the environment to deploy the allocated vessels in stronger trades while at the same time serving the Canadian trade with the right ship for the right demand at the right time. The Pacific Liner Service was mainly supported by our A-Class types while now, during the transition from Liner Service into Semi Liner Service, AAL is deploying the entire variety from A-Class over the G-Class and M-Class to the W-Class which again allows AAL to target different cargo commodities on the return voyage and with increasing success as we have monitored the developments for the first six months. BCSN: How will the escalation in trade sanctions between the U.S. and Canada affect the local MPV market and by how much?

Marc Schutzbier, Commercial Manager for Canada, AAL. MS: It’s quite difficult to make a prediction but in general, we support the trending opinion that the Trade Sanctions between the U.S. and Canada will not affect so much the trade volume performed water/ water but rather heavily affect the overland transport industry (rail/road). On the other hand, we see some of the Canadian bulk segments suffering from

The AAL Singapore docked at Ogden Point to deliver the Johnson Street Bridge in 2017. Photo courtesy AAL

MULTI-PURPOSE VESSELS Ever since the implementation of steel tariffs, steel prices in the U.S. have increased by 40 per cent in the short run. In the medium term, we are likely to witness a reshuffling of the global steel trade. the trade dispute between China and the U.S. China is not targeting Canada directly with the hefty tariffs imposed by Beijing on American imports, but due to the tight cross-border market, Canadian producers are starting to suffer since prices are driven south of the border. In 2018, the U.S. President brushed aside repeated warnings on the consequences of a trade war by officially imposing tariffs on imported goods and this has been met by retaliation from other countries. Among the U.S. multi-purpose project carrier trades (MPP), steel and project cargo are the ones likely to be affected by the trade conflicts. Ever since the implementation of steel tariffs, steel prices in the U.S. have increased by 40 per cent in the short run. In the medium term, we are likely to witness a reshuffling of the global steel trade. Steel movement in/out of the U.S. will be lowered as domestic supply ramps up. This will impact MPP carriers who are using steel as base cargo for U.S. trade. For countries which are on the U.S. exemption list, more steel movement to the U.S.

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may originate out from them as compared to those on the list. In return, their steel import may increase too to make up for the export amount. This impact on steel is likely to be felt by the oil and gas vertical due to the amount of steel required. A reduction or delay in new projects are expected for the oil and gas industry unless supported by higher oil prices. As for the wind sector, it is likely to be business as usual other than the bottom line of wind turbines manufacturers taking a hit. Yet, if this trade war escalates further or persists over the long term, global GDP might fall by 2.5 per cent over the next three years. This will reduce project investments overall and have a huge impact on the MPP trade which ironically, the new tariffs will result in the exact opposite outcome that they are intended to produce: higher prices, less production, and fewer jobs. In terms of how this new era of strict U.S. import tariffs (and resulting import tariffs on U.S. goods in retaliation) will impact MPP carriers, certainly an alternative to steel cargo needs to be found — as the market shrinks and freight rates for this cargo fall. Lastly, with rising costs, there may be an opportunity for larger tonnage ships as steel shippers consolidate shipments for greater economies of scale. BCSN: When is the project cargo market expected re-emerge in B.C. and Canada? MS: 2018 is already a better year than previous years but still away from a booming region. With few projects being undertaken this year and next in Alberta and B.C., and two larger projects gaining some real momentum as well as a handful of smaller projects lined up across the Provinces, from B.C. through Alberta to Saskatchewan, we expect a better year in 2019 and finally a breakthrough in 2020. BCSN: What services is AAL currently offering in the region? MS: At the moment AAL provides a tramp based Semi-Liner Service originating from the Far East into the West Coast of Canada and the U.S. and the voyages continue into the U.S. Gulf and/or U.S. East Coast as well as Canada’s St. Lawrence Seaway. Despite the transition from a regular Liner Service, to a more flexible semi-liner service, AAL has been able to keep up its presence on the West Coast / U.S. Gulf and even increase the number of calls on the U.S. East Coast / Canadian St. Lawrence Seaway due to the use of different vessel types. BCSN: What are AAL’s plans in the market longer-term? MS: To become the preferred carrier in the provision of global ocean transportation solutions through sustainable growth in our fleet size and an unparalleled reputation. We are following the ebbs and flows of the Canadian market very carefully and, when the timing is right, will consider re-launching a Pacific Liner Service served by our A-Class (31,000dwt / 700mt max lift), giving us and the market the only heavy-lift capacity in this particular trade-lane. BCSN: With a number of other MPV carriers and non-MPV carriers in the market, what are the unique selling points of AAL that make it an appealing option for local shippers — for both commodity and heavy-lift project cargo? MS: AAL is the only project and heavy lift carrier operating in the Canadian marketplace. We not only know all the customers but have excellent experience and relationships with the

MULTI-PURPOSE VESSELS terminals, stevedores and other project cargo stakeholders in the region. Our local team is happy to support our customers in the very early stages of their own bidding processes — helping them to optimize their logistics plans with input and plans that can deliver real time and cost efficiencies. This team comprises engineering, commercial, port captains and operations personnel with solid project logistics backgrounds. Unequalled expertise: With a renowned maritime heritage and over two decades of experience, AAL has grown into one of the breakbulk and heavy-lift project sector’s most awarded and respected global carriers with the capability to transport our customers’ cargo to any compass point with the upmost efficiency, frequency and safety. AAL is not just a leading multi-purpose operator, but a ship owner and sector innovator with an unparalleled maritime pedigree. We have over two decades of experience in operating liner and tramp services that have served the world’s most dynamic industries and provided trusted solutions for their biggest and most demanding billion-dollar projects around the world. Whether on short, or long-term employment — with dedicated vessels, personnel and other resources — we understand the importance to all stakeholders of time and cost efficiency and can be trusted to deliver. Around the world coverage: Focusing firmly on customer service we offer unique ‘total’ multi-purpose shipping solutions, comprising three distinct and complementary service models that can be combined as required to provide seamless solutions: Tramp Global Solutions; Semi-Liner Services; and Liner Services. Fleet capacity, cargo intake and flexibility: We have invested hundreds of millions of dollars to painstakingly design and build MPV ships that are perfect for the demands of the heavy-lift project sector, both in terms of their individual cargo mix and intake capability and combined lifting capacity. AAL’s fleet is the sector’s youngest and comprises multiple MPV vessel classes. With the flexibility in design, configuration and equipment specifications, our vessels can carry any cargo type, from general cargo to breakbulk, project heavy lift and dry bulk cargo commodities and all at the same time. The fleet combines market-leading intake for unitized cargo, with extreme heavy-lift capability (max 700mt). Today, our growing fleet puts AAL in pole position within the Mega-Size MPV vessel segment (30,000+dwt), offering shippers the best economies of scale on every sailing and for any parcel size. 24/7 account management: Our customers enjoy a unique key account management service, with 24/7 multilingual support and transparency throughout their shipment lifecycles. Our operations, management systems and procedures are accredited to the latest and highest ISO standards possible and we employ the finest personnel and real-time maritime software solutions to ensure that every cargo entrusted to us is dealt with as efficiently as possible. AAL’s office and network infrastructure is spread across the world, with well-established local language offices strategically located in all primary MPV shipping hubs. These, in turn, are supported by a comprehensive network of top agencies — offering additional local market expertise and commercial support. Sector’s finest engineers: We have in-house Naval Architects and Marine Engineers working alongside our commercial,

operations and customer service teams to design, plan and execute even the most difficult operations with numerous ‘firsts’ and award-winning MPV solutions to their credit. Their extensive expertise in transporting all cargo types, combined with their unparalleled knowledge of our fleets’ stowage and lifting capabilities, allows them to push boundaries and explore opportunities for time and cost efficiencies within the confines of optimum crew and cargo safety. End-to-end operational control: AAL’s cargo transportation operations are monitored around-the-clock by a team of dedicated and fully resourced shipping professionals, spread across our regional offices around the world. It is their communication, problem solving, financial and project management skills that are essential to collecting and analysing all vessel, cargo and operational data, to help optimise sailing efficiencies. They are a primary conduit between our sea and land-based teams and cargo superintendents (CSIs) — themselves appointed to attend and oversee all aspects of our loading and discharge operations. Highly skilled and experienced crew: Our crews are handpicked by the world’s top crew managers (including the associated company, Columbia Marlow) from leading academies around the world and given vigorous on-the-job training and ongoing support. Our officers and Masters comprise some of the most highly qualified and experienced seafarers in the MPV sector and are committed to meeting their voyage instructions, whilst strictly adhering to AAL’s ‘zero harm, zero damage’ philosophy.

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TUGS

Around the world with Robert Allan Ltd.

obert Allan Ltd. continues to be the tug designer of choice worldwide. In the last few months alone, the Naval Architecture firm has delivered four tugs and had the keel laid for a fifth in far-reaching countries. Noting that Chairman of the Board, Robert G. Allan wrote about launching 1,000 vessels in the company’s three-generation, 80+-year history in early 2017, the count continues to climb well past that benchmark. Here’s the latest news from one of British Columbia’s most famous maritime businesses.

Thailand: Second RAmparts 3200 tug for Royal Navy

fter being awarded the construction contract of the second RAmparts 3200 tug early this year, the builder, Italthai Marine Limited of Thailand held the keel laying ceremony in July at its facility. The Royal Thai Navy (RTN) took delivery of the very successful RAmparts 3200 tug Panyi 857 from the same builder in 2016 and awarded this construction contract for a sister ship earlier this year. RTN senior officials including Admiral Naris Pratoomsuwan, Commander-inChief and the Navy Leadership attended the ceremony. The guests were accompanied

by Mr. Wirat Chanasit, Managing Director of Italthai Marine Limited. Similarly to Panyi 857, this tug will be built to the

notation of 100A1, Tug, LMC, FireFighting Ship 1 with Water Spray System, of Lloyd’s Register.

Singapore: Two RAmparts 3200 ASD tugs delivered

n August 2018, PSA Marine Singapore took delivery of RAmparts 3200 ASD tugs PSA Thor and PSA Hulk of Robert Allan Ltd. design, built at PaxOcean Engineering Zhuhai Co., Ltd. This evolved RAmparts hull form is developed to provide ship assist in the berthing and unberthing operations in ports/terminals and also coastal towing operations. Tugs of this design are capable of escort service as well. A special uniquely styled deckhouse and wheelhouse developed for PSA Marine exclusively, brings outstanding and appealing appearance. PSA Thor and PSA Hulk are additions to PSA Marine’s existing fleet which includes Robert Allan Ltd.-designed tugs of six RAmparts and twelve Z-Techs. Particulars of PSA Thor and PSA Hulk are: • Length Overall: 32.0 m • Beam, moulded: 12.0 m • Depth, moulded: 5.42 m • Maximum draft: 5.53m • Gross Tonnage: 496 The tugs were designed and constructed to satisfy all applicable Rules and Regulations of LR 100 A1 Tug, Escort Tug, Fire Fighting Ship 1 with Water Spray, LMC, UMS, IWS 52 — BC Shipping News — October 2018

Trials results were as follows: • Bollard Pull, ahead: 82 tonnes • Bollard Pull, astern: 78 tonnes • Free running speed, ahead: 12.5 kn The vessel has been outfitted for a normal operating crew of four. The Master and chief engineer’s cabin are located on the main deck, with four additional double crew cabins located on the lower accommodation deck. There is also a galley and mess room located on the main deck. The deck machinery comprises a Rolls Royce heavy duty render/recover escort towing winch on the bow, spooled with

220 m soft line on working drum plus 150 m spare line on the second drum. There is also a Rolls Royce towing winch on aft deck with a capacity of 720 m of Ø52 mm steel wire rope. Main propulsion for each tug comprises a pair of Caterpillar 3516C diesel engines, each rated 2,525 kW at 1800 rpm, and each driving a Schottel SRP 510FP Z-drive unit, with a 2800 mm diameter fixed pitch propeller. The tug is fitted with a classed Fire Fighting 1 system from FFS, driven off the starboard main engine.

TUGS Turkey: Completion of the Second RApport 1600-SX Harbour Tug

ökçay II, the second RApport 1600-SX tug built by Sanmar Shipbuilders, was completed in August, the first vessel of this design being delivered in May. The two tugs are identical except the Gökçay II has a more conservative power rating of 600 hp at 1800 rpm for a bollard pull slightly over 16 tonnes. These simple and economical tugs benefit from the latest design and construction technology for excellent performance and safety. The particulars are: • Length overall: 16.3 m • Breadth, moulded: 7.4 m • Depth, moulded: 3.3 m • Draft, navigational: 2.7 m • Fuel oil: 15 m3 • Potable water: 2 m3 • Crew 3 persons • Speed: 11 knots • Bollard Pull: 16.4 tonnes • Class: Bureau Veritas

The new RApport 1600-SX, designed exclusively for Sanmar Shipbuilders, is a safe, robust, and seaworthy tug ideal for general harbour duties. It meets all international and Class standards for

construction and stability. The tugs are built to a very high standard of finish and available for quick delivery with details customized to the owner’s requirements.

Kenya: RAstar 3200 tug delivered to Ports Authority

he new RAstar 3200 tug Eugene, constructed by Cheoy Lee Shipyards, Hong Kong, has been delivered to its owners Kenya Ports Authority, Mombasa, Kenya. Principal particulars of this new tug are: • Length O.A.: 32.00 m • Beam, moulded: 12.80 m • Depth, moulded (hull): 5.37 m • Maximum Draft: 5.80 m Eugene is classed and built according to the following Lloyd’s Register of Shipping notation: 100A1, Escort Tug, LMC, UMS, Fire-Fighting Ship 1 with Water Spray, Unrestricted Voyages, IWS On trials, the Eugene met or exceeded all performance expectations, with the following results: • Bollard Pull, ahead: 75.6 tonnes • Bollard Pull, astern: 76.0 tonnes • Free running speed, ahead: 13.5 knots The vessel has been outfitted with full accommodation for up to crew of eight. The Master’s and Chief Engineer’s cabins are located on the main deck, with three additional two person crew cabins on the lower accommodation deck. The galley and a spacious mess/lounge room complete the deckhouse arrangement.

The deck machinery comprises a shipassist hawser winch forward, manufactured by MacGregor and a radial type tow hook on the aft deck. In addition, a capstan is installed aft to facilitate line handling operations. The wheelhouse is designed for maximum all-round visibility and provides maximum visibility to both fore and aft deck working areas. Main propulsion for this RAstar 3200 tug consists of a pair of CAT 3516C HD high-speed diesel engines; each rated 2240 kW at 1800 rpm, and each driving a

Rolls-Royce 255 fixed pitch Z-drive unit, in ASD configuration. The unique hull form of the RAstar tugs gives these vessels a level of crew safety and comfort that will enable operation in conditions previously deemed unworkable. The RAstar hull form, developed and used exclusively by Robert Allan Ltd., has been proven in both model and full-scale testing to provide significantly enhanced escort towing and sea-keeping performance. The motions and accelerations are significantly less than those of comparable sized, wallsided “standard” tug hulls. October 2018 — BC Shipping News — 53

CMY

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