BC Shipping News - September 2015

INSIDE: CLEAR SEAS — ANOTHER STEP TOWARD ‘WORLD CLASS’

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

Volume 5 Issue 7

www.bcshippingnews.com

NEWS September 2015

Industry Insight Zoran Knezevic Port Alberni Port Authority

Ports Growth and diversity powering B.C. port changes

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Plus: Canada Transportation Act review:

Momentum and direction for critical years ahead

THE PORT OF PRINCE RUPERT

Growing fast. Going strong.

Prince Rupert is connecting Canada’s industries and communities to fast-growing Asian economies. As a North American leader in security, marine safety and environmental sustainability, we’re proud to uphold the highest standards while moving the world’s goods and resources through British Columbia’s northern trade corridor.

@rupertport | www.rupertport.com

Proudly servicing the Port of Vancouver for twenty-five years •

wood pulp

•

lumber

•

OSB

•

plywood

•

metals

•

pipe

•

general cargo

Richmond - 850,000 SF of new warehouses on 55 acre site loading 6000+ containers/month serviced by CN rail, ability to receive 85 rail and spine cars in one switch New Westminster - Nine acre container yard storage with reefer and repair facilities Nanaimo - Seven acre lumber transload facility; 1000+ containers/month Surrey - Seven acre lumber transload facility loading 500+ containers/month Sister company KTL Transport operates 150 trucks/day to the Port of Vancouver, with a fleet of 800 container chassis Tanjit Kalhar, CEO Euro Asia Transload Inc. tanjit@euroasiainc.com 604 515 4688 www.euroasiainc.com

Angena Kalhar, President KTL Transport Inc. akalhar@ktlinc.ca 604 515 1499

BC SHIPPING

Contents

NEWS

September 2015 Volume 5 Issue 7

Cover Story

20

7 8 12

18

Editor’s note

By Jane McIvor

Industry insight

Renewed vigour in Port Alberni Zoran Knezevic, President & CEO, Port Alberni Port Authority After three years of leadership under Zoran Knezevic, Port Alberni is starting to show signs of renewed vigour with two major projects being proposed — an LNG export terminal and the Port Alberni Trans-Shipment Hub.

Growth and diversity powering B.C. port changes

By Ray Dykes

29 LNG

LNG in BC Conference The future of B.C. natural gas on display this October

30

32

History lesson

Hoists the colours!

The history of signal flags

By Lea Edgar

35

Clear Seas

Another step toward ‘world class’ The Clear Seas Centre for Responsible Marine Shipping

Transportation

Canada Transportation Act review I Momentum and direction for critical years ahead

By Captain Stephen Brown

Transportation

Canada Transport Act review II The need to look beyond fixes

By Trevor D. Heaver

37 Containers

12

Cargo logistics

42

Class societies

44

Industrial marine

20 Ports

In brief

Industry traffic, letters and news briefs

40

SAFE Framework gives glimpse into future trade management

By Colin Laughlan Update from Lloyd’s Register on Alternative Service Delivery West Coast Shipbuilding and Repair Forum becomes Association of British Columbia Marine Industries

46

Council of Marine Carriers

Tugboat Industry Conference keeps true to its theme

48

Legal affairs

The new limits of liability under the Marine Liability Act

By W. Gary Wharton

50 Ferries

Passenger vessels Benefitting local communities across Canada

By Kristin Baldwin

52 Ferries

Landmark Interferry conference looks to the future

30

The B.C. Trucking Commissioner A single key performance indicator

By Darryl Anderson

On the cover: Port Alberni Port Authority’s inner harbour (photo: Dave Roels — www.daveroels.com); above: delivery of Nanaimo Port Authority’s new mobile harbour crane (photo courtesy Nanaimo Port Authority); right: Video screen shot from Clears Seas Centre for Responsible Marine Shipping (photo source: www.clearseas.org); left: Zoran Knezevic, President, PAPA (photo: Dave Roels — www.daveroels.com).

September 2015 BC Shipping News 5

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September 2015 Volume 5/Issue 7

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6 BC Shipping News September 2015

International Sailor’s Society Canada Vancouver Transportation Club

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

T

he title of this Editor’s Note was unabashedly stolen from Trevor Heaver whose contribution in this issue of BC Shipping News emphasizes the need for collaboration on a large scale if Canada is to prosper.

While in our July/August issue we focused on how partnerships between industry, government and academia (and First Nations, as Dr. Heaver points out in a separate letter to the editor) were providing opportunities to ensure B.C.’s ability to meet demands for the shipbuilding and repair sector, this edition again highlights

Turning the tango into a line dance the need for collaboration, this time in the overarching supply and logistics chains that are required to facilitate Canada’s growth.

The theme runs throughout the articles herein again: Ray Dykes’ interview with Port Metro Vancouver President & CEO Robin Silvester demonstrates the leadership role the port has taken to look beyond its formal jurisdiction to address road and rail capacity needs; Captain Stephen Brown writes about how the review of the Canada Transportation Act will need to take into account the

development of an infrastructure capable of moving people, goods and services across the entirety of Canada; Darryl Anderson looks at the importance of the drayage sector to ensure the smooth flow of cargoes; and Colin Laughlan describes a new framework that has the potential to change trade management.

We didn’t start out either edition of BC Shipping News with the intent to highlight collaboration and yet, here it is again.

Could it be we’re starting to understand that operating in isolation doesn’t work?

— Jane McIvor

September 2015 BC Shipping News 7

INDUSTRY TRAFFIC Ledcor continues to grow marine operations with six new barges Photo courtesy Ledcor Group of Companies

T

he Ledcor Group of Companies took delivery of six new cargo barges during the summer that will be used to serve clients in southwest B.C. Ledcor’s marine division has grown exponentially since its inception in 2012 and is on-target to double its fleet size by 2016, bringing its fleet totals to nine tugboats and 23 barges.

The six new barges, delivered from China, were jointly designed with Ledcor’s client Mainland Sand & Gravel to meet their market and operational requirements. The Mainland quarry in Mission produces high-quality aggregates that are delivered to various depots on the Fraser River. Two of the six barges are 73 metres in length and 18 metres wide, and will carry 3,800 metric tonnes of cargo onboard.

Four of the six barges are 63 metres in length and 18 metres wide, and will carry 3,300 metric tonnes. The barge dimensions and cargo lift capacities are right-sized for the water depths available at the quarry, loading dock dimensions, and in consideration of Fraser River bridges that the barges must

The six new barges, delivered from China, were jointly designed with Ledcor’s customer Mainland Sand & Gravel to meet their market and operational requirements.

transit under. The barges were designed

by Capilano Maritime Ltd., with Lloyd’s Register approving the design drawings and construction. Meridian Marine provided full-time supervision services to oversee the quality control aspects and also worked on behalf of Ledcor as the Owner’s rep with the shipyard and Lloyd’s Register.

Ledcor’s announcement comes on the heels of another recent acquisition that took place in March 2015, when the marine division added two new flat-deck heavy cargo barges and one 1,200 horsepower tug boat.

Letter to the Editor Dear Ms. McIvor,

Re: The village is making progress, July/August 2015 issue

Nigel S. Greenwood

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

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

THE GLOBAL HUMAN RESOURCE SOLUTION We bring you the best of breed in Crew Management, Crew Planning and Payroll Systems for the maritime and offshore industries.

Please visit our website for more information

w w w . a d o n i s . n o 8 BC Shipping News September 2015

I applaud the excellent coverage of the articles in your July/August issue dealing with the involvement of governments, industry and educational institutions in the development and ongoing support of the shipbuilding and marine engineering industries.

However, with the Whitecaps raising our hopes for the Vancouver soccer team making a splash in the play-offs, we must be sure that our references to ‘village’ are truly conceptual to avoid a New York commentator referring again to the ‘village of Vancouver’!

This soccer supporter truly embraces the sense of community involvement that is a part of the First Nations values and which can bring value through government, business and academia collaboration.

Sincerely Trevor D. Heaver, Vancouver, B.C.

NEWS BRIEFS Congratulations to BCIT grads!

F

aculty, friends, family and industry representatives were on hand to congratulate the graduating classes of BCIT’s Nautical Sciences (NS) and Marine Engineering (ME) programs. The ceremony, held in mid-July, was emceed by Brook Walker, Assistant Manager, Marine Personnel, Seaspan ULC. In addition to speeches from Laurie Sterritt, representing BCIT’s Board of Governors, BCIT President Kathy Kinloch, and Guy Ellis, Dean of the School of Transportation, students and guests heard from Captain Agnelo Pereira and Sanjeev Sarwal, Chief Instructors for the NS and ME programs respectively, and from Jeff Scott, Cooperative Education Coordinator. Valedictorians Dylan Adams (NS) and Christopher Wade (ME) had the honour of speaking on behalf of their classmates.

This year’s graduates

Nautical Sciences Dylan Adams Trevor Burnett Willem De Haan James Nairne Stephen Pearson David Repsch Sean Van Den Bosch

The following students were the recipients of awards from the marine community: • Oak Maritime Award: Dylan Adams and Christopher Wade • Transport Desgagnes: Trevor Burnett and Andrew Frank • Algoma Central Corporation: James Nairne and Sam Garmulewicz • Chamber of Shipping: Stephen Pearson and Geoffrey Eade • Vancouver Maritime Arbitrators’ Ass’n: Dylan Adams • BC Ferry and Marine Workers Union: Trevor Burnett and James Rottino • British Columbia Ferry Services Inc: David Repsch and Rui Feng Sun • Lloyd’s Register: Sean Van Den Bosch and Drew Canfield • Vancouver Conway Club: James Nairne • Nautical Professional Education Society: Willem de Haan and Colton Dececco

BCIT’s Nautical Sciences graduating class: Top row: Trevor Burnett, James Nairne; Middle row: Jack Davidson (BCIT Board of Governors), David Repsch, Willem De Haan; Front row: Kitty Chan (BCIT Board of Governors), Guy Ellis (BCIT School of Transportation Dean), Sean Van Den Bosch, Stephen Pearson, Dylan Adams, Kathy Kinloch (BCIT President), Paul McCullough (BCIT Advancement Vice President).

Photos courtesy BCIT

Marine Engineering Drew Canfield Colton Dececco Geoffrey Eade Andrew Frank Samuel Garmulewicz James Rottino Rui Feng (Raphael) Sun Christopher Wade

BCIT’s Marine Engineering graduating class: Top row: James Rottino, Rui Feng (Raphael) Sun, Andrew Frank; Front row: Christopher Wade, Drew Canfield, Colton Dececco, Samuel Garmulewicz, Geoffrey Eade.

Survitec expands product offerings

S

urvitec Group has announced that it has extended its product offering of marine electronics and infrared technology.

“You are likely familiar with our liferafts, marine evacuation systems, rescue boats, davits, pyrotechnics, personal flotation, rescue equipment, survival beacons and air/sea fire safety,” said Paul Christensen, new Sales Manager, Electronics/Thermal.

“Now you may also requisition marine electronics and thermal imaging products through our office.”

Christensen, formally with Startech Marine, listed off numerous product lines now offered, including Fraser Optics/Binoculars, Sitex, Marin-

eNav Monitors/Computers, Raymarine, Koden, KVH Satellite, ComNav Marine, McMurdo EPIRBs/ SARTs/PLBs, Analytic Systems, Icom Canada, MAQ Sonar, RosePoint Navigation, FLIR Marine, Nobeltec Navigation and many more.

Christensen went on to say that “we seek to provide the highest quality, one-source solution for all marine safety and survival product needs and service is a key aspect of this comprehensive solution. Therefore, Survitec Group will also provide technical support for this new range and provide the same high level of service you are accustomed to for our other product categories.”

Paul Christensen, new Sales Manager for Electronics/ Thermal for Survitec Group

September 2015 BC Shipping News 9

INDUSTRY TRAFFIC

Habitat for Humanity ReStore program offers solution for shippers with unwanted cargoes

S

uccessful businesses today are more than four walls and a door — they are an integral part of communities, locally and nationally. With that in mind, companies, associations and business groups are always looking for new ways to support communities through their everyday operations and to this end, the Habitat for Humanity Canada ReStore program offers a great opportunity.

When you think about Habitat, the first thing that comes to mind, other than Jimmy Carter, is their core mission of building safe, decent and affordable housing for low-income families in communities all across Canada. The ReStore program is a network of home décor and building supply stores that sell new and gently used items for home and garden. Funds generated go toward building homes for families. For the shipping/logistics industry, the ReStore network offers a solution to the issue of disposal of unwanted goods.

10 BC Shipping News September 2015

The first ReStore in the world was opened in May 1991 in Winkler, Manitoba.

At the time, it was seen as a green initiative that would help the local Habitat Affiliate dispose of left over building materials. Not only did it help them divert product away from a landfill, but it generated some revenue!

Today, with 95 stores now located throughout Canada, it takes hundreds, if not thousands of community partners to make the ReStore program work, from individual volunteers to billion-dollar corporations. The stores rely exclusively on donated products and many stores are as much as 90 per cent volunteer operated. In 2014 alone, ReStore had over 10,000 individual volunteers that contributed over 690,000 hours of time.

On top of the volunteer labour, inventory comes from individuals and local/national businesses. Stores graciously accept small items from individual home owners on a

daily basis and will provide a tax receipt for the value of the goods. At the same time, they have local and national partnerships with some of Canada’s largest manufacturers, distributors and retailers. The ReStore provides not only a way for businesses to give back to the community but offers a bottom line solution for disposing of problem inventory. Whether it’s end of line, discontinued, obsolete, overstock inventory, or unclaimed freight, ReStore saves companies money and diverts product from landfills.

The ReStore program provides logistics support, audit receipts for the value of the donated product, and a great opportunity for companies to leverage the Habitat for Humanity brand to thier benefit.

For more information, contact Rob Voisin, Vice President, ReStore and Product Support, Habitat for Humanity Canada at rvoisin@habitat.ca.

NEWS BRIEFS

Rules and Guidance for the Survey and Construction of Steel Ships

L

eading classification society ClassNK (Chairman and President: Noboru Ueda) has announced that it released amendments to its Rules and Guidance for the Survey and Construction of Steel Ships.

ClassNK continuously reviews, updates, and amends its technical rules and guidance as part of its ongoing efforts to improve the safety of life and property at sea, and to protect the marine environment. The Rules and Guidance are amended regularly in order to reflect the latest research results from damage investigations as well as changes made to relevant international conventions, IACS Unified Requirements, national regulations, and requests from the maritime industry. The amendments, dated 8 May 2015, include the following: • Requirements related to “Propeller Shaft Condition Monitoring Systems,”

in response to requests from the industry.

• Requirements related to “Material Factors of Rolled Stainless Steel and Stainless Clad Steel Plates,” to reflect recent research and development results.

• Requirements related to “Means of Escape from Machinery Control Rooms and Main Workshops,” to reflect changes made to relevant international conventions.

• Requirements related to “Installation Positions of Fixed Hydrocarbon Gas Detection Systems,” to reflect recent changes made to relevant IACS Unified Requirements.

The PDF files of ClassNK Rules and Guidance are available free of charge via ClassNK’s website www.classnk. com for those who have registered

for the ClassNK “My Page” service. To register for the “My Page” service free of charge, go to ClassNK’s website and click on the “My Page Login” button.

ClassNK has also released PrimeShipHULL (HCSR) Ver. 2.5.0 in response to the new IACS Common Structural Rules for Bulk Carriers and Oil Tankers (CSR BC & OT).

CSR BC & OT, which harmonizes requirements found in both existing Common Structural Rules for bulk carriers and double hull oil tankers, was adopted by the International Association of Classification Societies (IACS) Council in December 2013, partially amended in 2014, and applies to bulk carriers over 90m in length and double hull oil tankers over 150m in length contracted for construction on or after 1 July 2015.

For more information, visit www. classnk.com

September 2015 BC Shipping News 11

INDUSTRY INSIGHT

Renewed vigour in Port Alberni

Zoran Knezevic

President & CEO Port Alberni Port Authority

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

B

ack in the 1970s and 1980s, Port Alberni had one of the highest paid per capita workforces in Canada.

Fast forward through a couple of decades of battered forestry and fishing industries and things looked quite different when Zoran Knezevic came on the scene.

Now, after three years under Zoran’s leadership, activity in Port Alberni is ramping up. With two major projects proposed — an LNG export terminal and the Port Alberni Trans-Shipment Hub — Port Alberni is starting to show signs of returning to its former glory.

BCSN: Let’s start with some background on the Port Alberni Port Authority (PAPA).

What are your main areas of operations and activities?

ZK: PAPA is one of 18 port authorities in Canada — all are members of the Association of Canadian Port Authorities and operate with the same rules under the Canada Marine Act. We’re one of the smaller ports — last year we moved about one million tonnes of cargo. We have jurisdiction over a 47-kilometre-long inlet from the mouth of the Somass River through the remaining waters of the inlet all the way down to Tzartus Island, including Port Alberni’s inner harbour.

We operate as a Canadian Port Authority under our Letters Patent from the federal government, which designates us to oversee the inner harbour and shipping terminals and the remaining foreshore

12 BC Shipping News September 2015

...from fulfilling our core obligations as a shipping port, we’re also always thinking of ways to engage the community... waters of the Alberni Inlet under a headlease agreement with the Province of B.C. We’re quite diverse in terms of the kind of activities we undertake. We manage four marinas and one campground, over 100 foreshore and federal real property asset leases and 56 float homes in addition to our core business of shipping. We have a three-berth terminal with 7.5 hectares of land, from where we predominantly ship logs and lumber (780,000 cubic metres of logs last year plus 60 million board-feet of lumber); and four warehouses, three of which are operated by private businesses under separate lease agreements.

We lease one of our warehouses and part of our dock to Independent Seafood Corporation of Canada; another warehouse and outside storage space to Canadian Alberni Engineering; and the third warehouse as well as an adjoining large building to Cantimber Biotech Ltd., which is a new value-added wood fibre operation now in the process of setting up their operations. We are also proud to have assisted in the development of a joint venture between Hub City Fisheries

and the Tseshaht First Nation to retrofit, renovate and reinvigorate an ice plant and fish processing plant formerly operated by Port Fish.

There is also Centennial Pier, which performs as a floating breakwater providing protection for Fisherman’s Harbour.

The breakwater itself has become a great community recreation and leisure area for locals.

I think you can see that, from fulfilling our core obligations as a shipping port, we’re also always thinking of ways to engage the community, whether it be through tourism and recreational fishing, boating and camping opportunities or through partnerships and collaborative funding with organizations like Small Craft Harbours, First Nations, the City and the Island Coastal Economic Trust.

BCSN: I understand you’re also working on some significant projects. Let’s start with Steelhead LNG’s proposal for an LNG export facility.

ZK: Yes, that’s right. In late summer 2012, we were approached by a large global energy company looking at the feasibility of using Port Alberni as an

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

export facility for LNG. Before that, LNG was predominantly focused on the Prince Rupert area but the more we discussed the plan with the proponent, the more we realized that the Port Alberni region has many benefits and is well positioned for the export of LNG. Following those initial discussions, we started promoting the Alberni Inlet as a viable location. We went on a couple of trade missions with the Premier and we also signed a Protocol Agreement with the Huu-ay-aht First Nation to work jointly to develop this area as a worldclass port. When we originally signed the protocol, we were thinking of PATH (the Port Alberni Trans-Shipment Hub) however we were able to attract Steelhead LNG and other potential investors to look more seriously at Port Alberni as a potential location for either of these large-scale projects.

We facilitated discussions that brought Steelhead LNG and the Huu-ay-aht First Nation together and they have since signed an Opportunity Development Agreement to work together to explore getting the project off the ground.

BCSN: What about the Port Alberni Trans-Shipment Hub (PATH)? Could you describe the basics of the project and where things stand right now?

ZK: We embarked on that project a few years ago, initially with support from Infrastructure Canada and the Honourable Ed Fast, Minister for International Trade and Minister for the Asia-Pacific Gateway. The federal government approved 50 per cent funding for the pre-feasibility study in 2013 which has now been completed and proves overwhelmingly that the PATH project is viable and offers a number of significant economic, environmental and social benefits. Since then, we’ve put all the pieces together to provide a business case and we have submitted an application to the Build Canada Fund for up to 33 per cent funding. We’re currently waiting for their response and looking for investors for the remaining portion of the project cost.

BCSN: Tell me about the business case for PATH. ZK: PATH will be able to service the largest ships currently in operation but will also be built to accommodate even larger vessels on the global design “drawing board” such as those over 20,000 TEUs. All indicators point to the shipping industry employing larger ships because

Zoran points to Port Alberni’s harbour.

they make more economic sense for ocean voyages. However, you want to use that big ship for the shortest distance rather than what’s currently happening — the ship arrives on the West Coast and will go to Seattle, drop cargo there, then go to Vancouver and deliver cargo there.

Essentially, the big ships have become a delivery service and that’s not the best use for that design. Furthermore, when deploying ships in this fashion, the lowest common denominator rule applies; meaning the terminal handling equipment at the least equipped and capable terminal will decide the size of the vessel on that service.

The PATH project is much more efficient. I use the four-pronged efficiency concept: The first prong is a savings of three to seven days for each container vessel and

reducing its stop to one port call: Right now, a container ship from Shanghai passes by Port Alberni off the West Coast of Vancouver Island near the mouth of Barclay Sound, goes to Seattle or Tacoma, stays there for two to three days then goes to Vancouver, stays there for two to three days and then passes by Barclay Sound again about a week or so later. By bringing the ship into the Alberni Inlet, it will save at least three days for each container vessel (that’s based on a 14,000 TEU ship). If you’re considering 20,000plus TEUs, then you’re looking at a sevenday savings. Seven days is a sweet number because it means the shipping line can take one ship out of rotation and that’s a major savings for them.

Savings number two lies in the vast reduction in land transportation cost and handling and sorting cargo in the

Providing advice and assistance to the maritime community.

29th Floor, Three Bentall Centre 595 Burrard Street, PO Box 49130 Vancouver, BC V7X 1J5 Tel: 604-688-0401 / Fax: 604-688-2827 www.owenbird.com Patrick J. Haberl 604-691-7523 Gregory J. Tucker 604-691-7553 Harley J. Harris 604-691-7520 September 2015 BC Shipping News 13

INDUSTRY INSIGHT This will be among the most modern automated container terminals in North America. Ship-to-shore container discharge will be done with the most modern dual-hoist dual-trolley container cranes... existing terminals. Terminals in the Lower Mainland and Seattle are situated a distance away from the industrial areas — in Vancouver’s case, most of the warehouses and distribution centres are located on the banks of the Fraser River which means cargo needs to be trucked from Deltaport or Vanterm and Centerm, constantly. With PATH, a barge takes the container right next to the distribution centre and reduces the distance of that truck trip by no longer having to navigate the increasingly congested roads of the Lower Mainland.

For rail, when the cargo is unloaded from the ship, it will sit at the terminal for an average of 2.8 days (a typical dwell time). It is sitting on some of the most expensive real estate in North America.

By going through PATH, it will have an

14 BC Shipping News September 2015

average dwell time of 1.8 days with a 24-hour transit from Port Alberni to match the arrival time of the train so that the container gets loaded right from the barge to the train. And we can deliver the cargo in bite-size chunks and do a ‘milk run’ to all of the terminals in the Lower Mainland. Cargo could be delivered just in time, where needed and in the quantity that the offloading facility can handle.

PATH will be able to pre-sort all of the cargo as market demands and deliver it to the closest point to the end user, thus significantly reducing the land transportation cost. I like to say that any paved parking lot becomes a possible transfer terminal on the vast coastline of the Salish Sea area from Squamish to Olympia.

The third prong of savings is at the PATH terminal itself. This will be among

the most modern automated container terminals in North America. Ship-toshore container discharge will be done with the most modern dual-hoist dualtrolley container cranes and PATH will be able to handle 6,000-plus containers in 24-hour period. Once offloaded from the ship, containers will be whisked to a fully automated container yard by AGV (automated guided vehicles) and an automated stacking crane to a final resting point. A container will be sitting there, on probably what is the least expensive land throughout the network, until required to be moved again using a reverse process. The terminal operating cost of PATH would be at least one-third of what the handling costs are in existing conventional terminals in the Pacific Northwest, and, even though it’s an automated terminal, I have a letter of support and endorsement from ILWU Canada.

The fourth prong is Vancouver Island itself. The population of Vancouver Island is currently about 780,000 people.

Within the next decade or so, that number is expected to grow to one million. It’s a large market in its own right. Right now, everything is shipped back and forth from

the Lower Mainland to the Island. Here’s just one example of what happens: There is a company just outside of Port Alberni that moves about 6,000 FEUs of lumber annually to Asia. Right now, they load lumber packs on a flatbed truck which is shipped (via BC Ferries) to a warehouse in Surrey where it gets unloaded. Then a container truck goes to Deltaport or Vanterm, picks up an empty container, takes it to the warehouse, waits for the lumber to be loaded and then goes back to the terminal to drop it off. Essentially, that’s five truck trips for one container load coming from Vancouver Island. It adds congestion and increases CO2 emissions on the busy streets in Vancouver.

We did a study in 2013/2014 where we asked those operating in the forest products industry within a 100-kilometre radius of Port Alberni to identify obstacles for getting their product to market and without exception, every single one noted costs in shipping. The forestry sector is B.C.’s largest export industry. More than 33 per cent of everything we export is a wood-related product. In the ever-competitive and changing global market economy, we are seriously affecting our ability to cost-effectively market our most sought-after product.

It costs roughly $1,000 more for each FEU shipped from the Island versus the one shipped from the Lower Mainland and it costs at least $1,000 more for each container of cargo produced on the Island, transported to the Lower Mainland by truck or ferry, and loaded onto container ship which will pass by the Alberni Inlet a few weeks later on its way to Asia.

Just based on these savings alone, PATH indicates a lucrative business venture.

The examples I’ve just given you are focused on straight economics. If we look at the savings from an environmental viewpoint, the argument gets even stronger. SNC Lavalin did a study and, assuming 200,000 TEUs, the study estimated a savings of 14.5 million truck kilometers annually. That’s removing 22,000 tonnes of CO2 emissions from the Lower Mainland. The same study determined that commuters using the Massey Tunnel alone would be able to save $76 million a year.

Soft benefits are not just limited to environmental savings and the positive impact on the environment. Benefits of security and safety would also be enabled

by PATH. Both the U.S. & Canada would be able to screen containers (including those with hazardous goods) sooner and

September 2015 BC Shipping News 15

Zoran with Mark Gordienko, President, ILWU Canada.

further away from urban centres. The recent fire at Centerm was a very unfortunate example of what could happen with hazardous materials in containers located within a densely populated area.

Even though PATH would be an automated terminal, it will still require a large operating workforce. At 25-per-cent capacity, it will still require around 400 full-time jobs and will pave the way for the further development and growth of Vancouver Island.

PATH will also provide resiliency to the APGCI (Asia-Pacific Gateway Corridor Initiative) as an alternative to any disruptions to the transportation chain, whether caused by natural disasters or man-made ones.

PATH will enable the short–sea shipping industry to grow so we can move more goods more efficiently to areas with the least impact to communities. We need bike lanes and truck lanes, they are both equally important. It’s up to us to find a balance and PATH provides that balance.

BCSN: What sort of reaction are you getting from the community about PATH? ZK: Support from the community has been overwhelmingly positive — especially with First Nations where we have a Protocol Agreement in place with the Huu-ay-aht First Nation.

We also have letters of support from a number of communities across Vancouver Island. They see this as very beneficial if not crucial for the entire Island.

BCSN: I’d like to touch on the capacity for PATH and whether you think this will be too excessive given Port Metro Vancouver’s plans for T2 and Prince Rupert’s expansion of Fairview Terminal.

ZK: Capacity essentially boils down to how fast you can move containers in and out. Given the automation of the terminal and if you keep the barges arriving consistently. I would venture to say our capacity could be as much as four million TEUs. In terms of excess capacity, looking at the Fairview expansion first — that’s essentially a separate gateway that services predominantly Eastern Canada and the U.S. Midwest and is a single line in/single line out that is dependent on rail for its growth. I don’t see them being affected by PATH as the concept focuses on the optimization of the existing transportation chain in the Salish Sea area — Vancouver, Seattle-Tacoma and Vancouver Island — PATH’s hinterland of about eight million people.

For Port Metro Vancouver, their studies show that container volumes are expected to grow to seven million TEUs by 2030 — they were just shy of three million last year and are expected to continue with that pace of growth. Seattle–Tacoma was over

16 BC Shipping News September 2015

three million last year. I believe strongly that T2 needs a “relief valve” like PATH in order for it to operate properly. Daily truck traffic alone is expected to surpass 7,000 trucks from the combined operations at Deltaport and T2 — at peak hours, they will exceed 1,000 trucks per hour. By taking barges from PATH directly to warehouses and distribution centres on the Fraser River, the Roberts Bank corridor would be able to handle the remaining truck traffic more efficiently.

I worked at Deltaport for 12 years. It’s designed, and works like a charm, when it has empty rail cars waiting to do a direct transfer from vessel to rail or load/offload rail directly from the water. Deltaport has probably the best rail car utilization in North America because of its design, which works best when there are empty cars. PATH will enable Deltaport to virtually have empty rail cars all the time for its cargo.T2 is required and we will need it to meet growth, however I don’t believe it can operate without PATH or a similar concept to move containers more efficiently and reduce the impacts of trucking.

For Vanterm and Centerm, both have limited areas for growth and it’s difficult to move cargo in and out of such congested locations. PATH will provide a platform to deliver container cargo in

About Zoran Knezevic

B

orn and raised in Eastern EuropeMontenegro, Zoran’s career within the maritime industry started as a Merchant Marine with the (then) Yugoslavian shipping company Prekookeanska plovidba which took him aboard various types of vessels including commercial and passenger ferries, bulk carriers, container and general cargo vessels. He immigrated to Canada in 1992, where he began his on-shore career with Cast Terminal in Montreal.

After moving to Vancouver, B.C., in 1997, Zoran joined with TSI Terminal Systems Inc. where he spent 12 years in various roles at Deltaport Terminal — first as a ship planner, then as Operations Superintendent and finally as Senior Operations Manager where he was responsible for day-to-day operations of the largest container terminal in Canada and responsible for a staff of over 400.

In 2010, Zoran moved over to SMIT Marine Canada where he was the Harbour Towage Manager for Southern B.C. He was also the Vice President, Operations, for Harbour Link, responsible for the efficient and costeffective daily operations of the off-dock, trucking and drayage facility.

During his time at SMIT and Harbour Link, he was also an independent consultant with PortSide Solutions and worked with marine transportation companies on several projects.

As a high-calibre, seasoned marine transportation manager with over 20 years of professional experience, Zoran was hired as President and CEO of Port Alberni Port Authority in July 2012.

Zoran currently lives in Port Alberni with his wife, three children and his mother. His oldest daughter is enrolled in the University of Victoria.

Photo credit: Dave Roels

Photo credit: BC Shipping News

INDUSTRY INSIGHT

INDUSTRY INSIGHT bite-size portions, streamlined to maximize the footprint usage of the facilities in the downtown area.

PATH would further enhance the opportunity to more efficiently reach the warehouses and distribution centres upstream along the Fraser River and reduce the negative impact on the increasingly densified residential and commercial areas.

The same logic can be applied to the Seattle and Tacoma areas as well. It will reduce and remove cargo from the downtown core in the same way. And let’s not forget the Vancouver Island component. If you have one million people by the time PATH is built, that’s a lot of consumers. If you estimate that currently, Vancouver Island trades up to a half million TEUs annually with the Lower Mainland and the forecast is for significant growth, the number of TEUs will just increase as well.

BCSN: If I understand you correctly, you don’t see PATH as a competitive threat to T2?

ZK: I don’t believe it is. I strongly believe that ports on the West Coast should be working under the same umbrella. This concept of a ‘super port’ or ”BC Ports“ that encompasses the entire West Coast has been raised in the past and I believe there are a lot of benefits to it. Port Metro Vancouver — being as important as they are — is operating in isolation and limiting trade to just the Lower Mainland. It doesn’t take advantage of the land elsewhere that’s required for expansion. From a holistic view, Canada needs to utilize all of its assets to be able to maintain that economic growth. We have to work together to ensure we stay competitive.

BCSN: I’d like to spend our last few minutes discussing your leadership strengths and the skills you bring to Port Alberni, especially with terminal operations. You’ve been in the job for just over three years now, how are you finding it?

ZK: Yes, absolutely my experience with terminal operations has influenced how I do this job. I’m also a Master Mariner and sailed on various ships for 10 years before settling in Canada. So I understand shipping from the water side — not just containers but all types of cargo.

I spent 12 years at Deltaport, four of which I was the Senior Operations Manager, and before that, superintendent in charge of all operations, traffic flow, gate ship and rail operations.

Subsequently, I worked at SMIT Marine, managing the southern B.C. division where I was responsible for the day-to-day operations of all harbour assist and towage in Vancouver Harbour and the Fraser River. I was also at Harbour Link as the VP of Operations — managing day-to-day operations of their fleet of over 80 trucks.

To summarize: my 360-degree work experience in the marine industry does give me a good overview of the marine transportation industry more specific to the West Coast.

When the opportunity to work at the Port Alberni Port Authority came up, I saw a lot of potential for growth. Coupled with my work experience and a strong natural desire to grow business, it made for a great fit. The board has given me great support and, in the interest of the port and the community, I’m hopeful Port Alberni will see some long-term benefits to our work.

I’m really proud of what we’ve achieved so far. We have created a great team here. Not to single anyone out because they all do a great job but David McCormick, our Director of Public Relations & Business Development has contributed significantly to the success of our port. While most of the staff has been here longer than I have, I think I’ve brought a new energy and more drive to fully engage all of our members

towards port growth and development. That’s been my proudest achievement.

The results of our hard work are paying off for the community by creating more jobs and more opportunities connected to our waterfront. And I believe the community’s perception of the port has changed over the last three years — it is much more positive and much more supportive of the initiatives we’ve been undertaking.

Overall, it’s been a really good move for me. I enjoy the work and I really enjoy working with my board, my staff and the community. BCSN

About Port Alberni Port Authority

T

he Port Alberni Port Authority was formed July 1, 1999, as a continuation of the Port Alberni Harbour Commission. Under the Canada Marine Act, the Port Authority has mandated jurisdiction of the Alberni Inlet from the Somass River to Tzartus Island.

The inlet is prone to calm waters, is free from any navigational obstacles, is ice-free year round, and offers a direct shipping route to the Pacific Rim. With a length of just over 40 kilometres from the inner harbour and an average width of roughly 1.5 kilometres, the Alberni Inlet can easily accommodate Post-Panamax-size vessels.

Port Alberni Port Authority is responsible for both the day-to-day operations of the harbour, and the long-term development and improvement of the waterfront facilities, including recreational marinas and secondary industries to the extent that these activities are specified in the Port Alberni Port Authority Letters Patent. The Port Authority is committed to working with the community towards economic diversification; its vision is “to be a thriving, diversified international port.” The mission of the port is to facilitate profitable maritime trade and marine-related tourism and industry by offering services and leadership that respects both the community and the environment.

Port Alberni Terminals operates three deep-sea berths with a storage assembly area of 17 acres. The terminal has historically handled lumber, pulp, newsprint, plywood and logs. In addition, the Port Authority operates four successful marinas. There are three pleasure craft marinas; Clutesi Haven, China Creek and Harbour Quay, with a total of 543 berths and Fishermen’s Harbour for the commercial customers with a total of 500 berths. Along with China Creek Marina, the Port leases lands from the Regional District to operate an adjacent 250-site campground.

The Port Authority manages over 100 leases and land exchange agreements. Property development roles and responsibilities of the Port Authority include the review and awareness of land development opportunities; to review and address property issues; and to administer the leasing, permitting and licensing of tenants and activities along the Crown portion of the Alberni Harbour.

For more information: www. portalberniportauthority.ca

September 2015 BC Shipping News 17

HISTORY LESSON Hoist the colours!

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

The history of signal flags

By Lea Edgar

Librarian/Archivist, Vancouver Maritime Museum

M

arine communication today is largely accomplished by hightech means. Still, many will recognize and admire the small colourful flags sometimes seen flying from vessels. This method of communication was developed before the advent of the radio and is called flaghoist signalling (or maritime signal flags). Currently, signal flags are largely seen only on “dressed ships” hanging from bow to stern on holidays and special occasions. Even though these flags are almost never used, they can still relay meaningful messages, whether hoisted individually or in small groups.

Before the radio took over, signal flags were one of the best ways to communicate at sea. In fact, mariners still learn this form of communication in order to sit their exams today.

The history of maritime signal flags stretches back to ancient times. It is said that Athenian captains used flags to

send messages between their ships. But it wasn’t until the 19th century that they were standardized and heavily in use.

Now, any form of non-naval signalling — by light, sound, radio or flag — falls under the International Code of Signals (ICS).

Before that, there were various codes in existence, making communications on the open ocean potentially quite confusing.

While there is evidence that the Royal Navy used signal flags as far back as the 1500s, one of the first established codes was from Admiral Lord Howe, developed in 1790. Eventually, the Royal Navy took the idea and developed its own code which it published in a book in 1799. In 1800, Captain Sir Home Popham expanded upon the Navy’s code by using a telegraph flag to refer to a separate dictionary of words and phrases. This allowed for more complex communications. In fact, perhaps the most famous signal of all, Lord Nelson’s 1805 message at the

St. Roch entering Halifax flying her call sign, 1950. Parks Canada St. Roch Photograph Collection, Farrar Collection: HSUS-50-01. Image has been colourized from the original black & white.

18 BC Shipping News September 2015

Battle of Trafalgar which read, “England expects that every man will do his duty,” was conveyed using Popham’s code. By 1813, the British code communicated 6,000 phrases and 60,000 words. Shortly after, the American Navy developed its own code using a similar system.

These systems were working quite well for the world’s most powerful navies, but what about the civilian ships?

In the 1800s, there were various commercial codes the average merchant seaman could use, including Lynn’s, Squire’s, Phillips’, Röhde’s, Raper’s, Walker’s, Watson’s, Rogers’, Reynold’s, and Marryatt’s to name a few. The most popular of the time, however, was Marryatt’s (published in 1817).

Marryatt’s code consisted of six parts: a list of English men of war, a list of foreign men of war, a list of the English merchant vessels, a list of lighthouses, ports, headlands, rocks, shoals, reefs, etc., a selection of sentences, and the vocabulary. These words and phrases were conveyed using numerical flags only. His code was devised just for British ships and was based largely upon the Navy’s code, although he added more words specifically for commercial use.

Marryatt’s and the other codes were useful; nevertheless, the need for a single code to be used internationally was apparent. The first International Code was drafted in 1855 by a Committee set up by the British Board of Trade. They first examined all the most popular codes in use at the time however their code borrowed most heavily from Marryatt’s.

For example, Marryatt’s Union Jack with a white border meant “I require a pilot,” but with the new code it was changed to signal the letter “G.” The International Code used 70,000 signals with 18 flags and was published in 1857. The book was very successful and was adopted by

most seafaring nations. They decided against using a purely numerical system so they named each flag to ensure that each character was familiar. They also decided that the letters of the alphabet would suit this purpose best, although they originally left out the vowels. There were a few revisions over the years but the true test of the code came with the First World War when occasions of signal failures were numerous.

In 1927, a conference was held to further revise the code. At this time it was decided that it would be translated into seven languages: English, French, Italian, German, Japanese, Spanish and Norwegian. The new edition also included aviation vocabulary and medical codes. This edition was completed in 1930 and was adopted at the International Radiotelegraph Conference in 1932. Several further revisions were made until the 1969 edition which is still largely in use today. At that time, Russian and Greek were added to the translations and some flag meanings were adjusted. The most recent print edition of the code was published in 2005.

The history of using flags at sea stretches far back into human history. Many of the flag designs themselves have unique histories that could constitute their own articles. Signal flags are even the origin of some popular naval phrases such as “Bravo Zulu” meaning “well done.” Although they may be seen as outdated, signal flags are not only eye catching but still meaningful in a society that — perhaps too heavily — relies on technology. Hopefully, these analogue methods of communication continue to be taught and celebrated into the future and not just to decorate ships. One just never knows when our modern technology may fail. It is certainly comforting to have an alternative when the power goes out!

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

Photo: Dave Roels

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

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

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

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

Untitled-1 1

2/7/2013 1:14:42 PM

September 2015 BC Shipping News 19

PORTS

Photo by Dave Roels, www.daveroels.com

H

istorians looking back on 2015 will probably have the last say, but this era in history of British Columbia ports could well be defined as one of growth and diversity.

Almost every port it seems is making sure it doesn’t put all of its maritime trade eggs in one basket. Once, it was forestry that carried the day and mining sure has had its turn too, but today, ports are keen to have multiple interests from potash to containers; liquefied natural gas to wood pellets; and raw logs to coal; plus a healthy assortment of break bulk opportunities.

Port Metro Vancouver President & CEO Robin Silvester says the growth and diversification in Canada’s largest port has been enabled by “significant infrastructure investments made in our Pacific Gateway.”

But Silvester warns there are major challenges ahead. As Canada’s demand for trade grows, he says it creates pressures on communities and the environment. Perhaps with an eye to all B.C. ports he adds: “It is up to us as a port authority to manage this growth in trade

Growth and diversity powering B.C. port changes

By Ray Dykes

>>>“It is up to us as a port authority to manage this growth in trade in a sustainable way so we ensure that future generations enjoy the benefits of trade, a healthy environment and thriving communities.” in a sustainable way so we ensure that future generations enjoy the benefits of trade, a healthy environment and thriving communities.”

Here’s a round up of activity at B.C. ports for 2014 and year-to-date 2015.

Port Metro Vancouver

Unlikely to surrender its title as the most diversified port in all of North America anytime soon, Port Metro Vancouver and its 28 terminals are coming off another record year in 2014 spanning five business sectors — bulk, break bulk, containers, autos and cruise. Total tonnage handled reached a shade under 140 million tonnes, which was up three per cent over the record set in 2013.

Photo by Dave Roels (www.daveroels.com)

Port Metro Vancouver’s proposed Terminal 2 will join Deltaport and Westshore Terminals (the busiest coal export facility in North America) at Roberts Bank.

20 BC Shipping News September 2015

Year-to-date figures through May show the pace has not slackened and continues with a three per cent climb over the previous record year. As the port that bulk built and containers powered, Port Metro Vancouver had only one category that didn’t improve over the same five months a year earlier — chemicals, basic metals and minerals, which were down 13.3 per cent at just over six million tonnes.

The rest of the YTD report makes for good reading — containers humming along, up 11.6 per cent; coal up 1.5 per cent despite a global pricing swoon and an over-supplied market; fertilizers, such as potash and sulphur, up 10.5 per cent; forest products, led by raw logs and wood chips up 5.4 per cent; grain up 9.5 per cent thanks to strong performances by wheat (up 26.4 per cent) and other cereals and specialty crops (up 36.7 per cent and 31 per cent respectively).

It’s a good news story, but it needs to be tempered by the frequent warning from PMV’s Silvester that there is a serious shortage of industrial land to help sustain the port’s growth and diversification.

But life goes on and in July, PMV announced a $12-million jointly-funded project with Transport Canada to provide shore power to two of PMV’s container terminals — Deltaport and Centerm — with at least one berth each initially. Vancouver has had shore power for visiting cruise ships since 2009 and

PORTS

Victoria

Diversity is a little harder for the Greater Victoria Harbour Authority, but it hasn’t stopped the port from improving what it already has. The cruise trade is over 60 per cent of business and the 2015 season is going strong and heading for yet another record year. The cruise facility at Ogden Point is Canada’s most popular port of call for cruise ships, not to be confused with Vancouver which is the most popular home port in the nation.

Cruise is big money — estimated direct spending by passengers and crew in 2014 is over $32 million and the impact on the regional economy is about $100 million — and under the GVHA’s stewardship, cruise tourism has grown from 110 ship calls carrying 161,000 passengers in 2002 to what will be a record 229 ship calls and 513,000 passengers in the 2015 season. Put more simply, this means that over the past decade cruise ship calls to Victoria have more than doubled and passenger numbers have more than tripled.

Photo credit: Ivan Watson

was the first port in Canada to do so while Victoria has recently decided to rely on cruise industry moves to install on-board scrubber technology on visiting liners.

There are some hefty projects being considered by PMV, including the Terminal 2 container facility for Roberts Bank. After four years of study, a comprehensive Environmental Impact Statement for Terminal 2 was submitted last spring to the Canadian Environmental Assessment Agency for consideration.

Any progress is subject to regulatory approvals and permits, market conditions and a final investment decision.

Over $700 million in support funding was received by the port and its communities and stakeholders to complete 17 infrastructure projects designed to increase trade capacity with minimal impacts on local communities.

Silvester often points out these “leading-edge environmental engagement and infrastructure projects” the port has completed “to help balance this continued growth with our local quality of life.”

Looking ahead, the port has its Port 2050 Plan with four different scenarios to guide it through the demanding trade requirements of the future. In the meantime, it is part of a widely represented Gateway Transportation Collaboration Forum designed to make a group submission for funding to help power the Pacific Gateway’s future.

New GVHA CEO Ian Robertson had the pleasure of welcoming Victoria and Joseph Winthal of San Francisco, CA as the sixth millionth passengers to visit Ogden Point.

On July 29 this year, Ogden Point welcomed its six millionth cruise ship passenger. The average time spent in port by each vessel has grown to seven hours with a 17 per cent increase in daytime calls.

In April, the GVHA welcomed new CEO Ian Robertson, a veteran tourism specialist who has worked in the past with Rocky Mountaineer Railway, Tourism Industry Association and Vancouver Parks Board.

One of Robertson’s early goals is to see a much-stalled Ogden Point Master Plan finally come to fruition. Consultants are now working on identifying zoning changes that will be needed throughout the City of Victoria. The GVHA has an ambitious plan to have Victoria chosen as a home port and Robertson hopes to have the first ship named by 2020. “There’s a lot of interest,” he has found.

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September 2015 BC Shipping News 21

PORTS In other projects, the harbour authority is seeking $250,000 of federal Western Diversification funding to enhance and improve the popular Inner Harbour causeway in time for a celebration of Canada’s 150th birthday in 2017.

The work is due to start in 2016.

Looking ahead, Robertson says the authority will also develop a Master Plan for the Inner Harbour including all of its marinas.

Nanaimo

There’s good news from the Nanaimo Port Authority as tonnages handled

by the port authority and its partners reached 4.1 million tonnes in 2014 compared to 3.7 mt in 2013 and 3.0 mt in 2012. The port reduced its deficit to $391,000 in 2014 and expects to do better this year.

“We’re heading up and it has a lot to do with the container business,” says Bernie Dumas, NPA President & CEO. Most of the containers are barged to Centerm in Vancouver by DP World Nanaimo, which has the contract to run the port’s Duke Point Terminal.

A trial call by MV Westwood last August was the first container ship to berth at

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• Containers • Project Cargo • Bulk • Break Bulk Duke Point Deep Sea Terminal: • Enhanced Efficiencies • Minimal Congestion • New Load/Discharge Options • Continuous Container Movement

the port facilities giving a direct link to Asia. The vessel has returned about once a month since picking up a few hundred containers, largely destined for Japan.

Container movements will be boosted by the arrival of a near new Liebherr 500 mobile harbour crane late in July and Dumas says the acquisition will be “a great asset.” The biggest crane of its type on Vancouver Island, the Liebherr will replace the ancient single container gantry crane which the NPA bought for $1 from Centerm many years ago. It has proved valuable but costly to run with the port authority forced to make its own parts to keep it going.

ABC Recycling Ltd., a new tenant at Duke Point, ships scrap metals overseas as part of the global recycling market. ABC is currently renovating its new five-acre site at Duke Point and will also use the existing barge ramp to move scrap metals to Tacoma and other ports. In a year or two, Dumas says ABC should be loading its own deep-sea vessels at Duke Point.

The NPA has sought $20 million in federal Building Canada funding to help in the transformation of Duke Point with DP World.

As part of its growth and diversification, the NPA also welcomes cruise ships at its dedicated facility — three this season including the Silver Seas, the first Alaskan cruise ship to make a regular call that is not part of a season opening or ending repositioning.

A new Helijet service to and from Vancouver is also using the cruise facility as its booking office and helicopter passenger terminal. The current four daily flights each way will jump to eight flights a day in September.

The port also ships raw logs on an intermittent basis but lately the market has been struggling. And news of any fast ferry service between Nanaimo and downtown Vancouver is infrequent and despite a lot of ink being written about it, no new service has begun.

Crofton

THE SOLUTIONS PORT

@portnanaimo

250-753-4146 ext.229

22 BC Shipping News September 2015

www.npa.ca

Catalyst Pulp & Paper in Crofton on Vancouver Island has two deep-sea docks and a barge ramp, which it uses to ship pulp and paper around the world. Most of the shipments in 2014, which totalled 338,000 tonnes, were pulp. Only two ships, totalling 10,000 tonnes, carried break bulk paper. In addition to that total, barge volumes topped 321,000 tonnes in 2014.

PORTS Catalyst’s Director, Distribution & Order Fulfillment, Gerry Rolufs, says the 2015 shipments to date are running at about the same pace as in 2014.

TimberWest — Canada’s largest private timber company — uses a third Crofton dock owned by Catalyst to ship raw logs at the rate of about two or three vessels a month.

Port Alberni

It is no secret that this Vancouver Island port is actively seeking to diversify (see this month’s Industry Insight on page 12). While the Port Alberni Port Authority values a continued forest products presence, it also has an active eye for other opportunities.

“We continue to be as proactive as possible to be ahead of the curve with respect to riding the waves of volatile markets,” says David McCormick, Director of Public Relations & Business Development. “In order to do this, we are committed to strengthening our existing relationships with our customers — who we see as business partners — and building new, diversified relationships with other companies and business ventures.”

By far the largest on the books and the most revolutionary is the $1.63 billion PATH — the Port Alberni Trans-shipment Hub — which proposes to fundamentally change how shipping is done on the West Coast. PATH has survived its feasibility study and has a Memorandum of Understanding with a foreign investor and several other companies interested in investing.

PATH would persuade container vessels to offload in Port BCSN September.qxp_1/2 pg horz 7/28/15 11:11 AM Page 1 Alberni for container transshipment to various locations on the

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Phone 604.988.3111 harbourteam@seaspan.com www.seaspan.com

September 2015 BC Shipping News 23

PORTS West Coast by barge. The port authority is seeking up to one-third of the funding for the project from the federal Building Canada Fund.

In another interesting new development, the port authority has completed an agreement with CanTimber Biotech Ltd., which will use port facilities to process activated carbon from “left over” wood waste from logging operations.

Throughput tonnages dropped in 2014 after a refreshing surge in 2013 with lumber shipments down 6.2 per cent to 76,854 tonnes and raw logs down 11

per cent to 783,381 tonnes. Both lumber and raw logs are down even further YTD through May. Commercial fishing is enjoying a better year with 12 visits by two factory ships. As well, a partnership between the Tseshaht First Nation and Hub City Fisheries plans to revive and enhance the previously closed ice plant and fish processing facility, idle for the past three years.

Other ideas include exploring a debarking project, providing shore power for visiting fish factory ships, container stuffing, handling more project

cargo, and boosting barge traffic. PAPA has also thrown its hat into the mix for an LNG export terminal.

Port McNeill

Another good year for Polaris Materials Corporation at its Port McNeill Orca Sand & Gravel quarry which shipped 3.3 million tonnes of aggregate used in concrete — just slightly less than the record set in 2013. So far this year, says Ken Palko, Vice President of Operations, the volumes continue on the same steady pace as in 2014 and the company is focusing on improved pricing and cost control for volume increases.

In mid-July, Polaris opened a new aggregate receiving terminal in the Port of Long Beach when the self-unloading vessel CSL Tecumseh discharged 77,000 tonnes of aggregates from the Orca Quarry. The products were offloaded using a new computerized conveying and stacking system specifically designed to maintain the integrity of the gravel products when stored in bulk quantities.

Polaris already ships aggregate to a similar facility in San Francisco.

The company is also exploring extracting a different type of aggregate used in asphalt and that it too, if found in suitable quantities, would use the shiploader at Port McNeill.

However, the market hasn’t yet recovered enough to suit the building of a second aggregates plant shipping millions of tonnes of product from Port Alberni, Palko says. “It’s still on our books,” he adds.

Prince Rupert

24 BC Shipping News September 2015

Another strong performance has highlighted the importance of increasing diversification for the Prince Rupert Port Authority. While 2014 was down 10 per cent in overall tonnage at 20.7 million tonnes over the record performance of 22.9 mt in 2013, the port is far from a onetrick pony when it comes to shipments and bills itself as Canada’s “leading edge port” and “North America’s fastest growing port for transpacific trade.”

New ownership by DP World and expansion plans at the all-important Fairview Container Terminal, which posted a 15 per cent increase in intermodal cargo last year, are driving the surge. Previous owners Maher Terminal LLC had already committed to a phased expansion to lift capacity to 1.3 million TEUs from the current 850,000. Yet another expansion is on the books to

PORTS Photo courtesy Stewart World Port

take TEU throughput to two million if it proves economically viable.

Coal exports have languished at Ridley Terminals in a difficult global market which has forced the closure of some of its major feeder mines. No wonder it was down over 50 per cent at the end of May 2015 over the same period in 2014 at 1.86 mt.

Wood pellets from the Westview Terminal were up 38 per cent at 252,435 tonnes and Prince Rupert Grain was down 7.7 per cent thanks largely to slumping shipments of grain pellets and wheat as barley and canola were up over 50 per cent YTD. Cruise traffic continues to wait for its big break and was down slightly as the season progresses.

Overall to the end of May, the port was running nearly 11 per cent behind its 2014 pace, but container traffic continued to shine as it was up nearly 43 per cent at 3.26 million TEUs. New projects continue to excite, especially in the liquefied natural gas field.

The proposed Prince Rupert LNG Project to be located on Ridley Island is in progress and should spend up to $15 billion to get exports rolling. Another similar project by Pacific NorthWest LNG, led by Petronas, on neighbouring Port Edward’s Lelu Island is awaiting federal environmental approval by the end of the year, and there are two other LNG ventures. As well, Canpotex has plans for a potash terminal on Ridley Island and this growth will sustain a strong future for the northern port.

Stewart World Port has completed its Phase 2 stage and is ready for business.

The Phase 3 stage will see the construction of a large storage shed and truck unloader and is expected to take nine months to complete before it is ready to handle such cargoes as mine concentrates, wood chips and pellets. There’s even been “some very interesting inquiries on the forest products side because of the low Canadian dollar,” says Moffat.

In its first full year, the port is expected to handle about 200,000 tonnes of bulk

materials. “It’s a build it and they will come scenario and that’s proving to be true,” Moffat adds. At the other major facility in the greater port area, Stewart Bulk Terminals — the family-owned bulk shipper — has completed a new storage building capable of holding 20,000 tonnes of ore. A long-planned expansion, which will allow dockside loading, is still in its permitting stage and is tangled up with other projects

Stewart

At last, Stewart World Port is more than a concept — its Phase 2 stage of a 230-metre-long deep-sea berth is ready and open for bulk and break bulk cargoes. The first inbound vessel is expected

by September, says Brad Moffat, Stewart World Port Chief Development Officer. The Handymax self-unloaders will range from 28,000 to 40,000 deadweight tonnes.

Moffat says there’s been a steady stream of inquiries about using the dock — as far afield as Asia and India and even some potential shipments through Germany. The facility, which is located only two kilometres south of the town of Stewart, has a draught of 35 metres at low tide at its deepest point and there are expected to be no tidal delays for sailings.

Up to this point, Stewart World Port has been a barge ramp-only facility. Now it is hoping to land a major bulk tenant to anchor its new deep-sea dock. “We are designed and ready to go,” adds Moffat.

September 2015 BC Shipping News 25

PORTS With a new Mayor and over $90 billion in maritime projects still teasing its 9,500 population with jobs and opportunity, the District of Kitimat may finally be coming of age. in current studies of the Portland Canal and First Nation concerns.

With Yukon Zinc shipments ceased and the company under creditor protection for now, it has been a tougher year for shipments through the facility. Copper concentrate from the Huckleberry Mine topped 66,000 tonnes in 2014 and Yukon Zinc put through another 72,000 tonnes.

Part-owner Dan Soucie says the facility expects to handle 130,000 tonnes of mainly copper trucked in from the new

26 BC Shipping News September 2015

Red Chris Mine south of Dease Lake, while this year Huckleberry should rise to about 80,000 tonnes putting the terminal back over 200,000 tonnes where it usually has been.

In other activity from Stewart, raw log shipments have been made by three forest product companies.

Kitimat

With a new Mayor and over $90 billion in maritime projects still teasing its

9,500 population with jobs and opportunity, the District of Kitimat may finally be coming of age.

Millions of dollars have been spent on site preparation by several projects and Mayor Phil Germuth says Kitimat is proving to be “a natural choice for shipping.”

Rio Tinto Alcan has almost completed its $5 billion-plus modernization project which will increase the smelter’s production by 48 per cent to about 420,000 tonnes of aluminum ingots a year and bring employment up to about 1,000 at the facility.

There’s an intriguing list of LNG terminals, pipeline projects, and a bitumen refinery going through the approval and funding process, but such has been the case for several years, often complicated by setbacks, litigation, protests and ownership changes.

Among the front runners to get up and running are Shell Canada and its LNG Canada export facility on the site of a former Methanex plant. A proposed two billion-cubic-feet-per-day facility is deemed “pretty sure.” Chevron Canada, recently joined by Woodside Canada in another LNG plant project that could ship five million tonnes of LNG annually for 20 years, was the first to get export permits and is building its own wharf.

And the Douglas Channel LNG floating plant is another that is advancing and will cost AltaGas Ltd. some $500 million in Kitimat. The Alberta company also has another project planned for B.C. to ship 25,000 barrels of liquefied propane from a yet-to-be-identified site.

Perhaps first away will be one of at least two floating barge LNG proposals, the first of which is expected to make a final investment decision by December.

Mayor Germuth, who took office last November, had first to contend with a 102-day municipal workers strike which rocked the town and its image. While the stoppage may have been the largest in B.C. history by municipal workers, the Mayor says “it’s over and behind us now.”

The private port has an enviable deepsea harbour currently served by three deep-sea docks but more are planned or under construction. This “rising star of the north” is ascending more slowly than hoped but its potential still remains largely untapped.

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

Istuary Innovation Group

September 2015 BC Shipping News 27

28 BC Shipping News September 2015

LNG IN BC The future of B.C.’s natural gas on display this October

B

ritish Columbia is experiencing unprecedented growth as a result of one of the province’s most promising resources — natural gas.

Natural gas is the world’s cleanest burning fossil fuel. This has made it an attractive commodity in markets where energy demands are increasing. For this reason, the province is building an export industry capable of shipping liquefied natural gas to Asia.

Exporting liquefied natural gas overseas will be a focus of the provincial government’s international conference — Clean Energy. Reliable Partner — this fall. Participants from all over the world will congregate in Vancouver and take part in three days of discussion that will help guide B.C.’s energy future.

The global LNG industry has an established history of safely shipping cooled natural gas around the world. The conference provides the perfect forum to discuss the latest technology, standards, safety measures and best practices for transporting natural gas overseas.

Highlights include: Larger conference scope — The conference is part of the provincial government’s commitment to ensure B.C.’s natural gas supports a growing and global economy. More than 4,000 people are expected to attend this year.

Three days, three themes — Each day of the conference will centre around three specific areas: Investment; Technology & Innovation; and Partnerships.

Insightful discussions to move B.C.’s LNG industry forward — A variety of panel sessions are planned relevant to the three themes, including clean technology and innovation in industries that utilize LNG, like transportation and shipping.

High-profile speakers and global participation — The conference will include participation by global LNG experts, industry proponents from around the world, educators, local governments, community leaders and First Nations.

There will be keynote speeches as well as involvement by many participants during the panel discussions.

Networking opportunities — The Vancouver Convention Centre space will be available for all registrants to use, including separate rooms for meetings that can be booked on-site.

Larger exhibit and trade-show floor — Last year, a tradeshow floor was added to the conference and it was a major success. This aspect of the event will be expanded, providing attendees with an opportunity to connect with stakeholders and companies, through programs like LNG-Buy BC. A ‘GameChanger’ youth expo will also be introduced this year, providing students with an opportunity to show their science skills and knowledge about energy.

The conference will be hosted by the provincial government at the Vancouver Convention Centre from October 14 to 16, 2015.

Registration is now open. Details, sponsorship opportunities and additional information about the event can be found online at: http://lngconference.ca.

September 2015 BC Shipping News 29

CLEAR SEAS

Another step toward ‘world class’

Background

Port Metro Vancouver was the lead organizer of the June 2013 trip to Norway where about 30 representatives from industry, municipal governments, First Nations, non-government organizations and other groups spent time in Oslo and Bergen to learn about Norway’s oil and gas industry and specifically, its spill response regime, often considered the epitome of ‘world-class’.

Originally, there were two primary objectives in mind — to begin to lay the groundwork for the development of a B.C. Centre of Excellence in liquid bulk handling; and to bring together a group of those advocating for and against oil and gas development in B.C. The concept soon expanded to include not only all of Canada but all aspects of shipping. As noted by Dr. Wiefelspuett, “to focus only on oil tankers off the coast of British Columbia would ignore risks from other sectors in other regions of Canada and we would lose the opportunity to provide a full understanding of marine activity across the country.”

30 BC Shipping News September 2015

Photo credit: BC Shipping News

W

hat started as a fact-finding trip to Norway in June 2013, has resulted in the first independent research organization to examine marine shipping in Canada. In July this year, Canada’s Minister of Transport, the Honourable Lisa Raitt, joined marine shipping experts, non-government organizations and other officials to announce the launch of the Clear Seas Centre for Responsible Marine Shipping — an independent, not-for-profit organization that will provide impartial and evidence-based research to inform the public and policy makers about marine traffic in Canadian waters, including risks, mitigation measures, and best practices worldwide for safe and sustainable marine shipping.

“This is an important initiative not only for the promotion of safe and responsible marine shipping but for the growth of Canada’s economy,” said Minister Raitt.

“Clear Seas will be able to share knowledge and recommend policy options about marine shipping based on reliable and fact-based information.”

Leading the organization is Dr. Richard Wiefelspuett as Executive Director, assisted by Policy Analyst Dr. Jody Wright and Office Manager April Allard.

Celebrating the launch of Clear Seas: Duncan Wilson (Vice-President, Corporate Social Responsibility, Port Metro Vancouver), the Honourable List Raitt (Minister, Transport Canada), Dr. Richard Wiefelspuett (Executive Director, Clear Seas); Dr. Kate Moran (Chair, Clear Seas); John Weston (Member of Parliament for West Vancouver-Sunshine Coast-Sea to Sky Country); and Tim McMillan (President, Canadian Association of Petroleum Producers).

>>>...Clear Seas will operate under guiding principles that include “openness, objectivity, excellence, and unbiased research and engagement.”

Dr. Wiefelspuett further remarked that Clear Seas will operate under guiding principles that include “openness, objectivity, excellence, and unbiased research and engagement.”

Funding

The Centre’s start-up funding comes from the Federal Government, the Government of Alberta and the Canadian Association of Petroleum Producers with each contributing $3.7 million.

Support agreements for each of the three contributors very clearly outlines the arm’s-length independence of Clear Seas.

The $11.1 million budget will be used to support the operational set-up, commencement of independent research activities and the pro-active engagement and dialogue with the marine shipping sector, non-governmental organizations, Aboriginal groups, coastal communities and other stakeholders. Formulas for subsequent funding are being developed that will likely consider a fee mechanism supported by the marine industry via Canadian ports (Port Metro Vancouver and Prince Rupert Port Authority have already voiced support for this concept).

Mandate

With a clear mission to be the “leading source of credible, fact-based information to bring clarity to decision-making for safe and sustainable marine shipping in Canada,” the Clear Seas team will not only be commissioning specific research activities but will also be building a database of existing research. “Third-party research will be very carefully reviewed prior to being added to our database,” said Dr. Wright. “A value-add that has been discussed is to have some form of a briefing on the conclusions that would identify comments from other experts — more of a critique as opposed to a peer review.”

Dr. Wiefelspuett agreed, noting that, above all else, the important factor was transparency: “We need to show not just the results of the research but the methodology and process that was used to get to the conclusions.”

A large part of the Clear Seas budget is allocated to research. Two initiatives, both being undertaken by the Council of Canadian Acadamies, are already planned: the first is a characterization of the risks of marine shipping in Canadian waters to lay the groundwork for further

CLEAR SEAS

Dynamic board and governance

Recognizing that credibility will be a key factor to the success of Clear Seas, the board of directors — themselves a diverse and experienced group of stakeholders — selected Dr. Richard Wiefelspuett to head up the centre as the Executive Director.

Dr. Wiefelspuett has over 30 years of international experience in the maritime sector. He has both a Master of Science in Mechanical, Shipbuilding and Offshore Engineering and a PhD in Mechanical Engineering and is perhaps best known to the local industry from his most recent posting as Associate Dean, BCIT School of Transportation, Marine Campus.

Dr. Jody Wright, Clear Seas’ Policy Analyst, is an ocean science expert with a passion for science communication, research management, stakeholder engagement, and leadership. Jody has extensive experience in facilitating large-scale, multi-disciplinary research projects and in leading multimedia science communication initiatives for an array of audiences including scientists, policy makers, the public, and other stakeholders.

Before joining Clear Seas, she worked as a senior research fellow at the University of Washington in Seattle, as a science educator at the University of British Columbia, and as a freelance science writer. Jody holds a PhD in Marine Microbiology (University of British Columbia), and a BSc in Environmental Science (Simon Fraser University).

Chaired by Dr. Kate Moran, the Clear Seas Board is a powerhouse of leaders from various sectors of Canada’s academia, industry and community organizations.

Dr. Kate Moran, Chair: currently President and CEO of Ocean Networks Canada (a not-for-profit society created in 2007 by the University of Victoria to develop and manage the NEPTUNE and VENUS Observatories and to position Canada as an international leader in the science and technology of ocean observing systems). She is also currently a Professor in the Faculty of Science at the University of Victoria.

Kim Baird, O.C., Vice Chair: best known for her role as Chief and Chief Negotiator for Tsawwassen First Nation; member of the BC Minister’s Advisory Council for Aboriginal Women and BC’s Aboriginal Investment Council.

Christopher Causton: currently a Goodwill Ambassador and Captain of Victoria Harbour Ferries; former Mayor of Oak Bay with past service as Chair of the Capital Regional District Board.

Photo credit: BC Shipping News

research, analysis, and communication; the second study will quantify the value of Canadian commercial shipping and its impact on the lives of Canadians. Wiefelspuett pointed out that this will be the first research of its kind in Canada. “The results of this study will fill an important gap in understanding the real value of the sector,” he said.

The first study is expected in 2016 with the socio-economic study planned for release in 2017. A number of additional research projects are also being considered for the short term “to provide value to the overall conversation about shipping.”

Wiefelspuett and Wright are also charged with engaging industry, government and non-government organizations, Aboriginal groups and the general public — both in Canada and internationally. “Our first task is to listen and identify concerns so that we can direct our research and facilitate a constructive dialogue accordingly,” Wiefelspuett said. He will also be reaching out to international bodies to gain awareness of best practices around the world. “If we are to provide recommendations to policy makers on best practices, we can only do this by learning from the activities of other shipping centres around the world.”

The Clear Seas team: April Allard, Dr. Richard Wiefelspuett and Dr. Jody Wright.

Lindsay Gordon: Chancellor of the University of British Columbia and former President & CEO of HSBC Bank Canada.

Dr. John Hepburn: Vice President, Research & International at the University of BC. Bud Streeter: President of Lloyd’s Register Canada Limited with responsibility for Lloyd’s Register’s marine operations in North America.

Roger Thomas: retired Executive Vice President, North America at Nexen Inc. (an upstream oil and gas company responsibly developing energy resources in the U.K. North Sea, offshore West Africa, the United States and Western Canada).

Duncan Wilson: Vice President, Corporate Social Responsibility, Port Metro Vancouver.

John Woodward: Partner/Owner in Woodcorp Investments; previous CEO, Woodwards Department Stores and current chair of British Columbia Living Rivers, Pacific Salmon Endowment Fund and Pacific Salmon Foundation.

Conclusion

While it’s very early days for Clear Seas, the initiative is a welcome and refreshing strategy that promises to bring clarity to current arguments about shipping that have been fraught with mis-information and fear of the unknown. Clear Seas is yet another step in the right direction to ensure Canada’s maritime sector is ‘world class’.

More information can be found at: www.clearseas.org.

September 2015 BC Shipping News 31

TRANSPORTATION Canada Transportation Act review

Momentum and direction for critical years ahead

By Captain Stephen Brown

President, Chamber of Shipping of British Columbia

A

s we enter the traditionally busy fall season, there is a great deal of focus this year on the upcoming federal election and what the outcome will mean for Canada’s marine industry.

Since being re-elected with a majority in 2011, the government has undertaken a number of measures related to our industry, most notably Bill C-3 Safeguarding Canada’s Seas and Skies Act, but also very importantly, the Review of Canada’s Ship-Source Oil Spill Response and Preparedness regime. As many will recall, the review panel was chaired by Captain Gordon Houston and the panel’s

Another significant announcement was the decision to undertake a review of the Canada Transportation Act (CTA) as announced by Federal Transportation Minister Lisa Raitt... findings were publicly released at the end of 2013. Many, but not all, of industry’s recommendations appeared in the report and, of the overall 45 recommendations, the government accepted 44.

The challenge now of course is to implement the changes to Canada’s regime and

the government has identified recommendation No.2 as a priority, namely the implementation of a risk-based Area Response Planning Model for ship-source oil spills. Four pilot areas have been nominated including the southern portion of British Columbia with a target completion date for consultation of March 2017. The initiative will involve the collaboration of Transport Canada, the Canadian Coast Guard, Fisheries and Oceans Canada and Environment Canada and will include a funding program which provides for up to $2.1 million of financial support to enable the participation of local communities and Aboriginal groups.

CTA review — infrastructure development

Photo courtesy Furuno

32 BC Shipping News September 2015

Another significant announcement was the decision to undertake a review of the Canada Transportation Act (CTA) as announced by Federal Transportation Minister Lisa Raitt in June 2014. In addition to receiving written submissions, the review panel, under the Chairmanship of the Honourable David Emerson, has been extensively travelling the country hearing views from coast to coast to coast.

Given the complexity of Canada’s transportation system involving road, rail, aviation and shipping, the panel faces an enormous task in reconciling a mountain of divergent input and producing a report with meaningful recommendations by the end of this year.

TRANSPORTATION Inevitably, a key element in the recommendations will be the need to maintain momentum on infrastructure development priorities and funding. The recent Translink referendum underlined the sharp diversity of public opinion on this latter point but at the end of the day, infrastructure development requires determined political leadership that will not be swayed by the unfortunate NIMBYism that has become so much a part of our lives. Who remembers the protests on Eagle Ridge Bluffs during the realignment of the Sea to Sky Highway, or the difficulty with Municipal Mayors encountered by the Province in reaching agreement to proceed with construction of the Canada Line? Can anyone even imagine life today had those projects not been forced through by a visionary and determined provincial government?

Equally visionary was the decision by Port Metro Vancouver to initiate a round of consultation in 2010 in a $717-million Gateway Infrastructure Program encompassing three trade areas, namely Roberts Bank Rail Corridor, the North Shore Trade Area and South Shore Trade Area. Thanks to skilful construction and cost management, these projects were completed on time and largely below budget with PMV securing $3 million from other agencies for every $1 million that PMV and its customer stakeholders are investing. Was it contentious at the time? Certainly. A Canadian port directly involving itself in infrastructure development beyond its defined jurisdiction will inevitably generate questions but at the end of the day, no amount of investment directly in our ports will amount to much if we don’t have an infrastructure to support it.

Many, many countries have belatedly recognized the validity of this. The infrastructure deficit in the United States is huge and it’s the same thing from Australia to Africa, from India to Iran — the deficit is crushing and efforts to capitalize on trade are constrained.

Despite these major investments in transportation infrastructure to date, we are still lagging far behind what is needed to service the future needs of Canadian trade growth. World trade is reliably forecast to double by 2030 and treble by 2050 and it is reasonable to assume that the numbers for Canada will be very similar. Future demands on our road, rail and port infrastructure will be immense and the strategic investments necessary to meet these cannot wait. The launch in March 2014 of the federal government’s

10-year, $53-billion New Building Canada Plan to fund infrastructure projects in partnership with other levels of government and the private sector is therefore welcome but it is clearly not enough and falls well below the infrastructure investments being made by our major Asian trading partners. Additional mechanisms providing certainty for direct foreign investment in Canadian infrastructure development are likely to prove essential.

Launched in January 2015, “B.C. on the Move” is the Provincial Government’s new 10-year plan for the improvement of the province’s transportation network.

From a marine industry perspective, important elements are: • Advance development of the George Massey Tunnel Replacement Project • Initiate design for future construction of six lanes on Highway 1 from Langley to Abbotsford • Work with communities to plan and deliver highway interchange and overpass projects throughout the Lower Mainland • Construct highway widening, capacity, safety and operational improvements on provincial highways throughout the Lower Mainland • Delivering a Provincial Trucking Strategy • Upgrade and replace structures such as bridges and overpasses, so they can accommodate the increasingly heavy and large loads that industry needs to transport • Work with industry to expand the number of provincial highway

The B.C. Government has launched “B.C. on the Move” to improve the province’s transportation network.

corridors pre-approved for the transport of 85 to 125 MT loads • Streamline permitting and reduce the number of truck permits required while ensuring commercial vehicle safety • Work with industry to identify priority locations for new and expanded parking, staging, inspection pullouts and chain-up/off areas for trucks on key corridors throughout B.C. On the subject of developing preapproved transportation corridors, it is also pleasing to note the responsiveness of the Province, and Transportation Minister Todd Stone in particular, to overtures from the industry Project

With 12 countries, 800 million people, 40 per cent of global GDP, and one-third of all world trade, the Trans-Pacific Partnership would be a major boost to Canada’s trade.

September 2015 BC Shipping News 33

TRANSPORTATION Cargo Working Group which meets under the Chairmanship of PMV.

CTA Review — other issues

In its submissions to the CTA Review Panel, the Chamber has addressed a number of other issues including: • The application of the Canada Marine Act from port user perspectives • Competition policy • Port productivity • Break bulk capacity • Education, training and recruitment • Development of social licence • Cross Border Regulatory Harmonization • Red Tape Reduction • Marine emergency response structure

Free trade agreements

Since 2006, Canada has concluded free trade agreements with 38 countries, bringing the total to 43, making up more than half of the global economy and representing nearly one quarter of the world’s countries with a further eight agreements under negotiation. From a marine industry perspective, this is a

really big deal by way of the impacts it will have on our trade, our ports, road and rail capacity, labour supply and training initiatives, and the challenges of sustainable development across our supply chains.

We recognize that the Comprehensive Economic Trade Agreement with the European Union is controversial with some of our colleagues across the country, however this takes nothing away from the achievement and the potential trade benefits for Canada, likewise the Free Trade Agreement with South Korea.

A huge achievement for both parties was also the Free Trade Agreement signed in June this year between Australia and China — maybe Canada one day, too?

However, the really big fish out there is the Trans-Pacific Partnership and the huge importance for Canada in becoming a signatory. Here too there are difficulties to overcome, not least long-standing restrictions on B.C. log exports which our Asian trading partners wish to see lifted — as do our exporters. The stakes are high: • The 12 Asia-Pacific countries involved in negotiations represent almost 800 million people

Fold

to

Closer

is better.

Port Metro Vancouver is already close to Asian markets. And with unprecedented infrastructure investment in our gateway, we’re getting even closer.

TOKYO DALIAN

We’re building land-side projects that boost rail and road efficiency.

We’re increasing our container terminal capacity and reducing on-dock dwell through collaboration with supply chain partners. And we’re operating with longshore labour certainty to 2018.

YOKOHAMA

B USAN

S HANG HAI

We’re bringing your goods closer to market and you closer to your customers.

S H E NZ H E N HONG KONG KAOH S I U NG

Fold

34 BC Shipping News September 2015

• A combined GDP of around $27.5 trillion • About 40 per cent of global GDP • About one third of all world trade • A potential increased export market of $15-126 billion per year The challenge is how to fit all of these pieces together — more free trade agreements; development of an infrastructure capable of moving people, goods and services efficiently around this vast country; and a CTA review that comes round but once in a generation and which we are hoping will make recommendations that will potentially give us momentum and point our industry in the right direction in the critical years ahead. Most of all, we need another dose of visionary government to act on those recommendations and not be swayed by narrow minority interests — a luxury we cannot afford.

Stephen Brown joined the Chamber of Shipping of British Columbia in September 2008. He currently sits on several committees and boards representing the interests of the B.C. shipping community. He can be reached at stephen@cosbc.ca. For more information on the Chamber, please visit: www.cosbc.ca.

to

VANCOUVE R

TRANSPORTATION Canada Transportation Act review

The need to look beyond fixes

By Trevor D. Heaver

Professor Emeritus, University of British Columbia

Canadians frequently deplore our low standing in

O

n June 25, 2014, the Honourable Lisa Raitt, Minister of Transport, launched a statutory review of the Canada Transportation Act. The Honourable David Emerson is leading this third review, advised by five eminent Canadians. The first such review took place in 1993. The second was in 2001. The mandate of this review arises from the Act itself which requires a periodic review of the operation of the Act and certain other acts pertaining to the economic regulation of transportation to ensure they serve Canada’s current and future needs. While this review faces many similar policy issues as existed previously, the stakes are higher because of greater global competition. This is the case for the treatment of research and innovation in transport and logistics. It is especially important in British Columbia because the facilities of our ports are so space constrained yet they must serve the nation well. We must be smarter to be successful. The focus of my personal submission to the review was on research and innovation.

The previous reviews recognized the importance of research to inform government policies and business practices as the economy faced the need for effective adaption to changing conditions.

Unfortunately, the recommendation of the 2001 Panel that “the government increase its support for transportation research” fell on deaf ears.

Why does research matter?

Research is important generally for three reasons. The MacPherson Commission of 1961, on whose arguments our transport polices are still largely based, recognized the importance of research to inform government. In response, Transport Canada initiated programs sponsoring social sciences and engineering research but unfortunately, the

innovation. We aspire to do better. former was scrapped in the mid-1980s.

This has probably contributed to the knowledge gap faced by each policy review. The second reason that research is important is the contribution that it makes to supporting education programs for future generations. The third reason is the contribution that research makes to innovation. Canadians frequently deplore our low standing in innovation.

We aspire to do better. Yet, we have no transport research programs comparable in size or structure to those in many other countries. The examples of the U.S. and the Netherlands are given here; the former as our major trading partner and the latter as a country in which excellence in logistics is critical.

How does Canada compare?

Two years after Canada abandoned its university research program, the U.S. Transportation Equity Act for the 21st Century, 1998, authorized US$194.8 million over the years 1998 to 2003 for grants to establish and operate 10 regional university transportation centres and up to 23 other centres. Subsequently, the number of centres (over 60) and the level of funding both increased. In 2010, a review of the program concluded that more substantial funding over a period of years and a new framework for the program were required.

In the EU, most research activities, programs and policies take place at regional and national levels. Substantial funding and leadership is provided on an EU scale, as exemplified by the current Horizon 2020 initiative. However, national programs are important as exemplified by the Netherlands. The Dutch program is relevant for two reasons. First, the government identifies critical industries

for special support. One sector is transport and logistics: a key export service for the Netherlands. (It is a key capability for Canada, also, but more as a service for the competitiveness of Canadian importers and exporters, than as an export service, although services to U.S. trades and the services of international shipping companies are important.)

The second feature, as pointed out by the Dutch prime minister, is reliance on an implementation strategy guided by a ‘triple helix’ structure of government, corporations and the research community. This approach is referred to in documents as the ‘golden triangle.’ The Port of Rotterdam is an active initiator and participant in collaborative research.

It is an approach that works in the Netherlands’ transport and logistics sector not because the country is small but because public organizations, private businesses and universities believe in a collaborative approach and act accordingly. It might take two to tango; it requires much wider participation to do a line dance with logistics chain participants.

In an email communication with me, Liesbeth Staps, the International Liaison Officer of Dinalog who attended the 2014 Cargo Logistics Conference, states that although there are formal processes guiding collaboration in the Netherlands, “it is a process that is perhaps more in our culture.” I refrain from comparing practices in collaboration in logistics research and development between Vancouver and Rotterdam. Let me just say, the comparison is ‘interesting.’

The July/August edition of this magazine reported on the successful initiatives that are taking place in B.C. through the collaboration of governments, industry and academia in the development and

September 2015 BC Shipping News 35

TRANSPORTATION ongoing support of the shipbuilding and marine engineering industries. However, the success in this technological sector is in sharp contrast to the absence of any programmatic initiatives in the vitally important areas of transport and logistics management. Advancing collaboration and innovation in business management is harder because goals are more diffused and less tangible than engineered products. But greater innovation in management is vital to our success in an environment of global competition.

Why does the transport and logistics sector deserve special treatment?

Government support for research is warranted when the benefits of research to society exceed those to the research organizations. Government support mitigates underfunding.

This is a rationale for national programs, for example, the Social Sciences and Humanities Research Council and the Natural Sciences and Engineering Research Council. The government also has industry specific programs, for example, through the research centres focused on agriculture and forestry. It also has an active mining research program. These programs have historical and industrial structure reasons for government participation in research. Unfortunately, the historical roots of government involvement in transport are operational and regulatory. The needs for research have been largely ignored.

Government support for transport and logistics research is warranted because of a structural problem. It is a networked industry in which no one entity takes responsibility for the end

Dave aboard the CSL Tecumseh “Action Photography - everywhere!”

What action is required?

Since the recommendations of the previous reviews have not resulted in greater support of research in transport and logistics, more specific recommendations are required from the current review. I recommend that the review adopt forcefully the importance of identification of transport and logistics as a sector requiring research support. The level of funding for transport research should be increased in a material way and include allocations to the social sciences and humanities as well as to science and technology. The range of subjects eligible for support should include all modes and all geographies.

The framework for funding should adopt the golden triangle approach which is built on government leadership. It should enable identification of priority areas within transport for research to serve the national social, economic, environmental and political interests. Funds should be awarded based on evaluation of the short-term or long-term relevance of research proposals to the identified priority areas. Research is not just solving immediate challenges. The process of identifying priority areas should be the responsibility of a lead group involving representatives from business, universities and government. It should not be determined by government alone. As a part of the lead group process, the development of broad areas of research might be identified with regional hubs composed of multi-institution knowledge and expertise. For example, Gateway Logistics might warrant a major hub with various actors and three or four sub-hubs. In this way, regional conditions are reflected but in an interactive whole.

A promising recent development

“Dave’s not just a photographer, he’s an artist.”

Jane McIvor, Publisher BC Shipping News

36 BC Shipping News September 2015

product. An automobile is a product from a network of suppliers, but the company whose name is on a vehicle assumes responsibility for the product. When problems arise, the car company recalls cars. That company has a strong incentive to manage levels of collaboration and innovation in the supply chain. No individual company takes responsibility for the performance of a logistics chain, as is evident when there is a port strike or slow down in railway service. Companies too often act in their own interest with insufficient attention to the consequences of their actions on other parts of the logistics chain, especially when many actors are involved, as in ports. It is an environment, however, in which collaborative research comparable to the Dutch approach would be conducive to innovation.

In the last couple of months, Transport Canada has made a deliberate effort to reach out to and communicate with Canadian universities to learn more about the range and level of research being undertaken. What will follow is not known but opportunities exist for more support for research and more use of research results by government. However, the purpose of university researchers is not to act as consultants to government. Also, a significant player has been absent in this particular process — the corporate sector. The corporate sector has to be actively involved for research to contribute to innovation.

Hence the golden triangle approach is an essential component for research to inform government, to prepare future generations of managers and to foster innovation.

This article draws on Dr. Heaver’s personal submission, ‘Research and Innovation’, to the Canada Transportation Act Review, December 29, 2014 with thanks to David Lloyd of Saab Technologies for his comments on a draft of this article. Dr. Heaver’s submission is available at: http://www.sauder.ubc.ca (under the Faculty and Research section).

CONTAINERS The B.C. Container Trucking Commissioner

A single key performance indicator

By Darryl Anderson

Managing Director, Wave Point Consulting

T

>>>British Columbia Container Trucking Commissioner Andy Smith has only a single KPI: no more work stoppages in the Port Metro Vancouver drayage sector. on the West Coast waterfront has established his reputation for fairness while bringing reliability to Canada’s AsiaPacific Gateway.

With no less than two lawsuits launched by the trucking industry (one by Unifor which asks the court to enforce new provincially-imposed minimum rates that were previously promised as well as the removal of Smith from the Commissioner role; and the other by the United Truckers Association addressing the new licensing system and the resulting loss of jobs for hundreds of truckers), Smith remains focussed on the task of ensuring long-term stability for Canada’s largest port.

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

he performance of the drayage sector is vital to the cargo fluidity of Canada’s dominant container trade served by Port Metro Vancouver (PMV) as the conduit through the Asia-Pacific Gateway. Given this importance, it’s not surprising that 2014’s disruption in trucking service caused significant concern amongst shippers, businesses and government.

To address the issues, the B.C. Government appointed a B.C. Container Trucking Commissioner in early February 2015 to support better working conditions for container truckers and to ensure efficient and reliable operations at Port Metro Vancouver. The appointment of Andy Smith, who remains President and CEO of the B.C. Maritime Employers Association, has drawn some criticism from trucking industry representatives as a potential conflict of interest however, Smith’s record in successfully negotiating two historic eight-year collective agreements

Recognizing the importance of the drayage industry as a vital component of Canada’s supply chain, the B.C. Government has tasked the B.C. Container Trucking Commission with solving long-standing issues.

The importance of trucks

Thirty one per cent of laden import containers at PMV’s marine container terminals were transferred to truck in 2014.

Based on 2009 data, 70 per cent of the containers loaded to truck were destined for import transload facilities where the contents are transferred to larger domestic containers or trucks, and 77 per cent of this traffic is moved to local rail intermodal terminals for shipment to destinations outside of B.C. On the export side, 73 per cent of export containers were loaded in the Lower Mainland by truck and then moved to marine terminals in 2014. To support this container traffic movement, Port Metro Vancouver currently has 97 local trucking companies and 29 long-haul trucking companies licensed to provide drayage service. The drayage industry is composed of a variety of firms that service the needs of major retail importers such as Canadian Tire and Walmart; exporters of grain and forest products; and others who provide a more specialized project cargo-related logistic service.

We’re not alone

With a wide variety of client interests, supply chain professionals commonly manage a dashboard of key performance indicators (KPIs) to respond to customer requirements and one would perhaps expect a wide variety of KPIs to monitor the performance of the drayage sector.

Yet, British Columbia Container Trucking Commissioner Andy Smith has only a single KPI: no more work stoppages in the Port Metro Vancouver drayage sector.

September 2015 BC Shipping News 37

CONTAINERS inherent in the sector. To that end, Smith has the task of: • Assuming responsibility for all Truck Licensing System licences in place following the licence reform undertaken by Port Metro Vancouver; • establishing, and then consulting with an Industry Advisory Committee on issues relevant to the sector; • setting any future rates moving forward based on consultations with industry and the Industry Advisory Committee; and • having oversight of the whistle-blower line, investigations and enhanced auditing and enforcement.

Photo courtesy BCMEA

The Commissioner’s approach

B.C.’s Trucking Commissioner, Andy Smith, is tasked with ensuring long-term stability for B.C.’s drayage industry.

>>>...Commissioner Smith noted that his immediate priorities were to deal with pressure points identified in the March 2014 Joint Action Plan.

In contrast, in 2014, the Port of New York and New Jersey Port Performance Task Force established goals for drayage operations: Improve turn times and reduce delays at all waypoints so drayage truck operators can make multiple turns a day; ensure that timely and accurate information is available to facilitate routing decisions; and stage arrivals and provide an adequate workforce and fleet to meet demand.

More recent developments in the ports of Los Angeles-Long Beach signalled to the Journal of Commerce that the Southern California marketplace may be moving slowly toward a dual system of drayage in which some drivers are unionized employees while others prefer to remain independent contractors.

Eventually, the result could be a sufficient pool of drivers to service the 13 container terminals in the largest U.S. port complex, resulting in service and pricing consistency for shippers that depend on harbour drivers.

The above examples illustrate the fact that Canada’s largest port is not alone in exploring new approaches to the drayage sector or facing continuous competitive pressure from beneficial cargo owners. Industry eyes across North America are intensely watching Smith’s progress on the drayage file to see if local developments will impact the market share of container traffic. Thus, this article will explore the mandate of the Commissioner and his approach and progress to date.

The Commissioner’s mandate

In discussing his mandate, Smith noted that his immediate priorities were to deal with pressure points identified in the March 2014 Joint Action Plan. However, he firmly recognized that there would be no quick fixes in addressing the issues

38 BC Shipping News September 2015

The fundamental principles Smith used to describe how he approached his role were “consultation, accessibility, and above all else, a willingness to listen.” He firmly believes that one of the keys to long-term stability in the sector lies with licencees and their drivers being fully aware of his decision-making process.

One of the ways Smith has been upholding this philosophy has been through site visits to licence holders’ facilities. While he has made a significant number of site visits so far, he believes he has a way to go to reach his objective of visiting the premises of all licence holders at least once before this calendar year is over.

Stakeholders include both employers and owner operators.

Meeting with industry stakeholders to learn about the business first hand is highly informative for Smith who readily acknowledged his relative unfamiliarity with the nuances of various segments of the drayage industry. The site visits “have helped transform what were previously names on a spreadsheet to tangible operations, each with a unique story and experience behind them.” He recognizes that there are a “variety of market segments within the drayage industry. Those operating in the spot market are subject to more intense rate competition. At the other end of the spectrum is the specialized and dedicated drayage companies who work directly for the beneficial cargo owner.”

Learning from experience, Smith understands that situations are often more complicated than what they may initially appear.

Hence, he stressed the need to be trustworthy, direct and personal in his approach to developing solutions.

Progress to date

When asked about progress to date, Smith observed that a number of milestones had been reached. Most importantly, he referred to establishing “a general level of credibility and good will with industry — which is essential to change management.”

On a more tangible level, the Industry Advisory Committee, consisting of a cross-section of voices, has been struck. Members’ roles are strictly advisory in nature and the input Smith receives is used for guidance.

In May 2015, amendments made to the Container Trucking Regulation gave the industry more certainty regarding rates going forward. Smith acknowledged that the time it took to go through the government process to publish the rate was longer than he initially anticipated and the contentious issue of rate retroactivity is still a work in progress (referencing the aforementioned legal action). He advised that a small number of players (carriers and drivers) have signalled that they are in discussions and that others are watching. Smith recognizes that there are a wide variety of views, and considers settlement as the more preferable course of action. With this in mind, he would rather allow more time for a negotiated agreement rather than implementation by edict.

CONTAINERS Smith’s small team has also made some technical adjustments to the suite of agreements which make up the licence package and have established general guidelines on the audit process. Thus, he is now placing additional emphasis on dealing with day-to-day operational issues — for example, truck tags which would ensure fluid access.

Since 2005, the federal government required Port Metro Vancouver to introduce a Truck Licensing System. The program required all drayage companies and trucks draying marine containers (both local and long haul) to/from the port to enter into an Access Agreement.

The term “tag” refers to the equipment or number of trucks that are registered.

The Commissioner now issues the tags, hence, the number of trucks that make up the size of the drayage fleet.

Smith has determined that tag utilization, determined by examining GPS data, is the most accurate and effective gauge for managing the total licensed tag population. He will be assessing business activity as the key determinant of how effectively tags are servicing the marketplace. To this end, the licence amendments will ensure that greater tag fluidity supports economic considerations, both in terms of business necessity and driver earnings.

The Commission is also introducing procedural changes to licences. Smith

has become aware of situations where the actions of both Full Service and Independent Operators are causing tags to become idle, or at the very least, underutilized.

Smith recently called for applications from specialized and/or dedicated drayage companies who were not issued licences in the recent Port Metro Vancouver Truck Licensing System application process. This segment of the market is generally characterized by rate stability and is essential to enhancing the efficiency of the export supply chain. The Commission received a limited number of applicants in keeping with the intent and expectation of this application process.

Conclusions

One year after the last major work stoppage in the drayage sector, some progress has been made to flesh out details of a process to keep cargo flowing efficiently.

In fact, PMV data suggests that current drayage truck turn times (an important productivity measure) at Vancouver container terminals are among the best in North America. During the course of 2014, truck turn times were reduced by 20 per cent through industry initiatives, including Port Metro Vancouver’s Smart Fleet program.

Yet, discussions with drayage industry stakeholders also point to the important

role that PMV officials and marine container terminal operators play. Learning to adapt to the new rules has meant learning on the fly in many instances as the nuances and needs of the different segments of the drayage sector come more fully to light. In some instances reported to this writer, players involved in either making or applying the new rules cause certain situations to arise that result in additional costs or a reduction in service levels, or take more time to resolve issues than under the previous system. In a statement that perhaps indicates he has received similar feedback, Smith openly pondered the future of the industry. “I wonder whether the drayage industry needs to operate with prescribed regulation over the long term,” said Smith. “Perhaps there is a way for the industry to become self-regulating.”

While still early days for the office of the Commissioner, the direction and tone Smith has established foreshadows a willingness to openly engage all stakeholders with a common goal of “no more work stoppages in the Port Metro Vancouver drayage sector.” Whether this attitude is reciprocated, remains to be seen.

Darryl Anderson is a strategy, trade development, logistics and transportation consultant. His blog Shipper matters focuses exclusively on maritime transportation and policy issues (http://wavepointconsulting.ca/shipping-matters).

September 2015 BC Shipping News 39

CARGO LOGISTICS SAFE Framework gives glimpse into future trade management

By Colin Laughlan

Director of Communications, Logico Carbon Solutions Inc.

>>>...the WCO, whose principal role was traditionally

T

his year, the World Customs Organization (WCO) celebrates the 10th anniversary of its SAFE Framework of Standards to Secure and Facilitate Global Trade. Adopted in 2005, SAFE was developed to harmonize the multitude of Customs security systems arising around the world in the aftermath of the 9/11 attack in 2001. Over the past 10 years, the standardization of international Customs procedures and data, along with technological integration, has proceeded at an unprecedented rate.

Now, the WCO, whose principal role was traditionally seen as law enforcement, is poised to become the leading international agent for trade facilitation.

As discussed in the July/August issue of BCSN, the global Trade Facilitation Agreement (TFA) reached in 2013 by the World Trade Organization (WTO) provided the opportunity for the WCO to connect trade facilitation with the SAFE Framework. Almost immediately after the TFA was announced, the WCO issued its own supporting resolution, “. . . to send a strong message of support and to urge Customs to seize this golden opportunity to gain political support for Customs modernization,” said WCO Secretary General Kunio Mikuriya, “and to enhance partnerships with business, other government agencies and development partners.” In fact, it was a collaboration several years in the making, as Mikuriya had announced in a speech in 2008 that the two organizations “. . . agreed to support each using our respective advantages: the technical expertise of the WCO and the political clout of the WTO.”

Background

As early as 2002, the WCO had responded to a call for action from the International Maritime Organization and G8 countries with a resolution

40 BC Shipping News September 2015

seen as law enforcement, is poised to become the leading international agent for trade facilitation. calling for Supply Chain Security and Trade Facilitation. What developed was the Customs Integrated Supply Chain Management Guidelines, which served as the early vision for SAFE in 2005.

Recognizing that supply chains “consist of physical origin-destination movements of goods and the parallel movement of commercial data,” the WCO adopted a risk management approach using advance cargo information, and stipulated that “...the overall goal has to be to receive the necessary information to perform the risk assessment as soon as possible in the global supply chain...”

The next major development was in 2007 with the launch of SAFE`s Authorized Economic Operator (AEO) program. Companies doing business in North America were already familiar with the AEO concept through the U.S. Customs-Trade Partnership Against Terrorism and Canada’s Partners in Protection, which provided expedited customs cargo clearance for preapproved “trusted traders.” However, as trade facilitation instruments, national AEO programs depend on their recognition by other countries for effectiveness, particularly with respect to the data set required from member companies providing advance cargo information. To this end, the WCO launched guidelines for Mutual Recognition Agreements (MRAs) in 2011 and has been actively engaged in their implementation, but with modest success to date. Among the 168 WCO members that have committed to implementing SAFE, the number of AEO programs in operation is now 64 — 28 of which are the EU member states — and another 16 to be launched. An additional 33 MRAs have been concluded and 18

more are currently being negotiated.

Much of the WCO’s immediate challenge will be to facilitate more MRAs among AEOs, many operating in trading blocs around the world, as well as to transition the traditional compliance procedures of the other Customs Administrations to SAFE standards. The long-term challenge will then be to align the many bilateral MRAs into a global system. As we observed in our July/August discussion, the plethora of bilateral and regional trade agreements in the world poses a parallel challenge to the WTO’s vision of a globally integrated multilateral trading system.

Private sector advises on SAFE

The success of the trade facilitation dimension of SAFE will also depend on how it affects the private sector companies which make up the global supply chains it governs. As pointed out in a 2009 WCO research paper, The WCO Framework of Standards: Avoiding Excess in Global Supply Chain Security Policy: “Proponents of trade facilitation, while conceding that customs controls are needed to deter illegitimate trade, seek to change the traditional relationship between customs and trader from the regulator and the regulated, to procedural partners. In recognizing concerns about the impact on trade facilitation, the WCO ensured there was a security and facility coupling.

Thus, it is striking that what emerged was an agreement that strives for a balance between security and facilitation with the assumption that a border agency can apply appropriate controls for purposes of security while minimizing border crossing obstacles for legitimate trade.”

That need for balance, however, will no doubt see periodic push-backs by industry

CARGO LOGISTICS when proposed security solutions by governments are seen to go too far. One particularly salient example is a U.S. statute passed in 2007 which required scanning of every U.S.-bound container before vessel loading at foreign ports. So impractical was the legislation, “...it has never gone into effect and never will,” Robert Ireland, Head of WCO Research and Communications told BCSN. “Although it is officially still the law, the Secretary of the U.S. Department of Homeland Security can defer it indefinitely, which they have always done. Everyone recognizes that it is impossible to implement for both cost and benefit reasons.”

Responsibility for industry’s voice in SAFE falls to the WCO’s Private Sector Consultative Group (PSCG), created in 2006 to advise on security standards from a business perspective.

Composed of some 20 corporations and industry associations from different parts of the world, the PSCG has been chaired for the past seven years by a Canadian, Carol West, President of the Customs Brokers Society of Canada, and Secretary of the International Federation of Customs Brokers Associations.

“It has resulted in quite an amazing body of knowledge in supply chain security, the idea of AEO advance information for risk assessment so Customs administrations can deal with risk in order to facilitate trade,” said West.

However, West is not convinced that everything is going smoothly for the two important issues of AEO mutual recognition and advance cargo information.

Regarding AEOs, “…the amount of streamlining that business had hoped for from mutual recognition delivering benefits…isn’t quite there yet. There’s still some work to do there,” said West.

The other big issue is the actual number of data elements that companies must provide for advance cargo information on shipments. “As SAFE developed, one of the hard discussions we had for a very long time was about the…data required for advance risk assessment,” said West, explaining that the industry group and the WCO had agreed on which data were required both to facilitate trade and to meet security standards. .

“But what we’re seeing now is that some countries are going beyond that — they’re demanding elements outside the list.

We’re very concerned about that. The whole goal is to have harmonized standards, to reduce the cost to business, to increase trade facilitation, and to have more compliance in terms of world-wide security.” said West.

“The WCO has an interest in not allowing this to happen either,” West added. “As we work with the WCO, within a group called the SAFE Working Group which has both private sector and Customs administrations who participate in it, we collectively do not want to see activity beyond the scope of SAFE.”

SAFE’s new third pillar

SAFE was initially built on what the WCO called the “twin pillars” of Customs-to-Customs Networks and Customs-toBusiness Partnerships. This past June, a third pillar was adopted, adding Customs-to-Other-Government Agencies and Inter-Government Agencies. As part of the expanded SAFE Framework, this third pillar introduces standards for Preloading Advance Cargo Information for air transport, “…for carrying out a first layer of security risk analysis together with civil aviation authorities,” the WCO informed BCSN. “Pillar Three foresees co-operation at three levels — co-operation within governments, co-operation between and among governments, and multinational co-operation.”

The 2015 edition of the SAFE Framework enlarges that message: “The main objective of this co-operation,” it states, “is to

ensure that the government response to the challenges of supply chain security is both efficient and effective, by avoiding duplication of requirements and inspections, streamlining processes, and ultimately working toward global standards that secure the movements of goods in a manner that facilitates trade.”

Conclusion

Trade facilitation, as defined by the World Trade Organization, seeks to simplify, standardize, harmonize and modernize the procedures related to the data needed for the movements of goods in international trade. There is nothing incompatible in this with the security standards required to keep modern supply chains safe. But there is an ongoing need to continually seek and to negotiate the right balance between these two dynamic forces. The temptation for one side to impose any presumed “Archimedian Point” must always be resisted in favour of collaborative effort. The administrative pillars supporting the SAFE Framework are no doubt evocative of the physical towers of the WTO that collapsed in 2001.With the rise of the WCO’s SAFE Framework, one can get a glimpse of how the future of international trade will be managed, the tremendous amount of work that still needs to be done, and how global trade will continue, relentlessly, to move forward.

Note: A statement by Ruth Snowden, Executive Director of the Canadian International Freight Forwarders Association, as quoted in the article Single Windows and international trade agreements (BCSN July/August 2015), should have read “but we don’t have mandatory electronic export reporting.” The word “electronic” was inadvertently omitted. Apologies for the error.

IT’S SIMPLE: BEST SERVICE. BEST PRICE.

cpsales@cpr.ca | cpr.ca/en/our-markets

September 2015 BC Shipping News 41

CLASS SOCIETIES

CARGO LOGISTICS

Update on Alternative Service Delivery

I

n January 2014, Transport Canada brought in the Alternative Service Delivery (ASD) initiative as part of the Delegated Statutory Inspection Program (DSIP). ASD essentially transferred inspection and certification of existing unclassed vessels 24 metres in length and above from Transport Canada Marine Safety and Security to Recognized Organizations (RO — i.e., classification societies). As we close in on the twoyear anniversary of ASD, BC Shipping News sought out Bud Streeter, President, Lloyd’s Register Canada, to check on progress. Given that Lloyd’s has contracted for about 80 per cent of the share of eligible vessels in Western Canada to date, Bud’s insights were useful to get a handle on successes and challenges.

Background

Under the Canada Shipping Act, 2001, vessel owners must submit to regular inspections of their vessel, its hull, machinery and equipment to receive required documentation for operating in Canada. With delegation having been around in one form or another since the late 1960s, and gaining momentum through the 1990s and 2000s, the move toward Alternative Service Delivery for existing ships over 24 metres wasn’t that much of a leap, especially after studies showed that Transport Canada was heavily subsidizing the costs of inspections. New ships and imported vessels 24 metres and above are required to be built

to class and are entered into the DSIP. Existing ships must move into DSIP/ASD on the anniversary of their dry-docking date.

At the start of ASD, it was estimated that there were about 470 candidate vessels across Canada (145 in the Pacific Region), including passenger vessels, tugs and workboats, barges, fishing and cargo vessels. Of those, over 100 were 51-plus years old; 127 were between 41 and 50; and 101 were between 31 and 40 years. Less than 130 were under 30 years old.

Implementation

Initially, Streeter was surprised by the volume of work involved in incorporating ASD into Lloyd’s Quality Assurance system. Senior surveyors worked with one of Lloyd’s graduate engineer trainees to develop a documented process that would provide a consistent and repeatable approach for every vessel, from accepting the call right through to issuing the certificate.

“It took us about nine or 10 months to tailor a system that would fit the small ships. The key is consistency. So no matter what type of ship, the same process is used but with various add-ons to match the specifics of the vessel,” said Streeter.

At the same time, issues of liability were addressed. “Under normal class processes, we know everything that goes on the ship — we know how it’s built, we’ve approved the design, supervised the construction, certified the materials and machinery and we know the

complete history,” said Streeter. “In some cases, we’re taking on a vessel that we know very little about so we needed to work with Transport Canada to get an understanding of who has responsibility for defects that may have existed before the vessel was handed over from TCMSS to LR. We have that now. It was important to get that resolved.

“We take the approach that we have a contract with Transport Canada in our Delegation Agreement and have the same protection as a steamship inspector — i.e. if we’re doing our job in good faith, we have the right to limit our liability. If we’re wilfully negligent, and it is proven in court, we could lose the right to limit the liability in that case.”

One of the first criticisms of ASD from vessel owners was the notable increase in costs for certification. However, Streeter notes the services are very different from those provided by Transport Canada and TC was not recouping all costs associated with inspection and certification. “There are owners who think ASD is too expensive but there are others who appreciate the consistency and process that’s brought to inspections now,” he said.

“We’ve had compliments from owners about the assistance we’ve provided to educate them and help solve problems.

We’ll never be the cheapest because we have a big footprint and we pride ourselves on quality. We also invest in a lot of technology to the benefit of the industry.”

Streeter also suspected that now, with an increasing number of classification societies receiving Recognized Organization status — the number has gone from five to seven and another two are potentially in line — prices will be driven down through increased competition.

Benefits and challenges

42 BC Shipping News September 2015

“We bring a lot more process and consistency to the surveys,” said Streeter in response to questions about the benefits of ASD. “Our surveyors are not as restrained in terms of helping owners with advice based on the fact that the majority of our Plan Approval and Port Surveyors have been applying the Canada Shipping Act on our Delegated fleet of classed vessels for many years already.

That’s not to say TCMSS inspectors weren’t doing a good job but as long as there is room for interpretation, you don’t get the consistency needed. Inspections were predicated on the satisfaction of the attending surveyor and it was very difficult to challenge rulings.”

CLASS SOCIETIES Streeter said that, with Lloyd’s, most of the interpretations are done centrally, or by the Surveyor-in-Charge, so you get more consistent applications. And with Lloyd’s, if a vessel owner is not satisfied, there is room for recourse and a second opinion.

“In Transport Canada, the process of discussing alternative solutions has never been firmly established,” said Streeter. “Under the regulatory regime, for anyone but the originating surveyor to make changes, it requires a long process. In the meantime, you’re out of compliance.

“You can, of course, go through a process of voluntary compliance but then you’ve got a public record of being in violation of the law so it’s not a very effective process. Say, for example, a vessel has a problem with a life boat and they ask to replace it with a life raft. In most countries, that’s a straightforward request for exemption and approval can happen within hours. In Canada, you either have to go through a Marine Technical Review Board process which takes days or you have to agree to an assurance of voluntary compliance and operate in contravention of the law. And what happens if

opt out,” Streeter said, “but some of the newer ROs have decided that it doesn’t fit their business model so they refuse the vessel. We’ve had a discussion about this with other ROs and Transport Canada and changes are being proposed.”

If a vessel owner successfully pleads hardship, they can opt out for one inspection cycle but must apply again in four or five years (depending on their survey cycle). “By then, the policy should be fully defined — perhaps all ROs have to turn them down before they get the hardship.

There are vessels that none of the ROs would accept — for example, old wooden vessels.”

you’re in an accident while in contravention of the rules? You can’t tie up for 10 days or even longer while you wait for a board decision.”

Streeter explained that if an owner has a complaint about a Lloyd’s surveyor or survey, they can call the Surveyor-inCharge and if it’s agreed that there is an issue, they can change the determination.

“There’s nothing wrong with that. It’s a process that’s inherent in our Quality Assurance system.”

When asked about the challenges of implementing ASD, Streeter noted that, in addition to the exchange of information and developing an internal reporting system that needed to be completely transparent (i.e., one in which Transport Canada has full access), it was important to ensure all of the records passed over to Lloyd’s were up to date. This led to some surprises for owners who saw issues arise during the handover survey.

Another challenge that is being addressed is how to manage the existing hardship clause in place. Under ASD, a vessel owner can opt out of the program if three of the ROs refuse to provide services, thereby staying under Transport Canada inspections. “We don’t normally

Marine and Shipyard

Solutions

Conclusion

When asked about the future of ASD, Streeter figured the program will eventually terminate as vessels age out and are replaced: “One would presume that as the vessels are replaced, it will be with either a vessel under 24 metres, in which case TC will continue to inspect, or with a new vessel over 24 metres which will be fully compliant with class rules and in the DSIP program. Ultimately, I would think we’ll be phasing ourselves out — likely over 40 to 50 years.” BCSN

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September 2015 BC Shipping News 43

INDUSTRIAL MARINE West Coast Shipbuilding and Repair Forum becomes Association of British Columbia Marine Industries

44 BC Shipping News September 2015

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

A

pproximately a decade ago, a gathering of organizations and individuals within the B.C. marine sector came together to form the West Coast Shipbuilding and Repair Forum (WCSRF).

Initiated by Captain Alex Rueben, Commander Fleet Maintenance Facility Cape Breton, the informal WCSRF brought together players from industry, government and academia concerned with the development of a sustainable marine sector on the West Coast. The aim of the WCSRF was “to promote a viable and competitive shipbuilding and repair industry on Canada’s West Coast that can provide high quality, reliable, innovative services to domestic and international customers.”

Since initiation, the Forum has sought to do this, providing a focal point for raising and discussing matters of common interest. These include generating beneficial initiatives for the sector such as aligning with the Resource Training Organization to create the Human Resource Steering Committee (HRSC). This preserved and, where needed, created new trades unique and critical to the marine sector.

This is turn contributed to the 2012 BC Shipbuilding and Ship Repair Workforce Table, future projections of sector labour market information and an accompanying Human Resource Strategy. It also led to the creation of the Industrial Marine Training and Applied Research Centre (IMTARC) which has done much to train and educate the sector’s evolving workforce.

WCSRF has therefore sought to represent the interests of the whole industrial marine sector and drive initiatives that would address it’s challenges. However, with the continuing evolution of the sector, including the National Shipbuilding and Procurement Strategy (NSPS) and ferry replacements, Forum members asked if more could be done as a formally organized not-for-profit association. Therefore, under the leadership of President Mark Dixon and Secretary Mark Collins, investigations were initiated. A Working Group was formed which developed a draft “Membership Guide” containing a new vision, mission, strategic direction, priorities, objectives, membership benefits and a governance structure for an association.

At the spring Vancouver WCSRF meeting, the “Membership Guide” was presented.

The WCSRF membership then ratified

The vision of the new organization is to be the leading representative for the industrial marine sector of British Columbia.

the decision to move to an industry association, voted to dissolve the Forum and elected the members of the Working Group as an interim Board of Directors charged with getting the new association on its feet.

The association has been formally registered and incorporated under the Societies Act as the “Association of British Columbia Marine Industries” (ABCMI). The vision of the new organization is to be the leading representative for the industrial marine sector of British Columbia and a catalyst for its competitive, efficient and environmentally responsible industrial marine activity. It seeks to forge a strategic view of the sector and be an innovative contributor to the international competitiveness of British Columbia marine industries.

The role of the ABCMI is to: • Represent the interests of British Columbia’s industrial marine sector to governments, opinion leaders, the membership, labour, businesses and the general public.

• Promote the sector as a viable and competitive industry that provides high quality, reliable, and innovative services to domestic and international customers.

• Foster understanding about the interdependencies of our sector and the knowledge that working together makes the sector stronger.

• Position British Columbia’s industrial marine activity as an identifiable sector with the size and coherence which attracts investment and has the

capability to execute complex projects.

Within these roles, ABCMI’s objectives for its first two years will be: workforce development, implementation of a marine sector strategy, supply chain development and establishment of membership benefits. In the immediate future, the interim Board and Directors will sign up membership, complete an initial business plan, and call an inaugural meeting of the ABCMI before the end of 2015.

At that meeting the Interim Board and Executives will resign and an election of new Directors will be held.

To be effective and succeed, it is vital the ABCMI have a dynamic and engaged membership. The ABCMI is seeking to represent those “making their living in the industrial marine space of B.C.” This includes, but not restricted, to shipyards, ship owners, consultants, labour groups, suppliers and manufacturers, educators, designers, engineers, marine lawyers, industrial development policy makers and public entities. As such, all the former members of the WCSRF are invited to join the new organization, as are any persons, companies or organizations in or with an interest in the marine industrial sector.

If you are interested in joining, or you are seeking additional information, ABCMI can be contacted at:

Association of British Columbia Marine Industries 100 Maplebank Road Esquimalt, BC, V9A 4M1 T: 778-265-5005

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September 2015 BC Shipping 45 8/7/15News 10:41 AM

COUNCIL OF MARINE CARRIERS Tugboat Industry Conference keeps true to its theme

T

he B.C. Tugboat Industry 21st Annual Conference, hosted by the Council of Marine Carriers (CMC) in late May, kept true to its theme of “Rising to the new Coastal Challenges.” A well-rounded roster of speakers provided presentations that focused on those issues most relevant to the West Coast — LNG, e-Navigation and charting, spill response, escort and rescue towing, TERMPOL and tanker safety to name but a few. And with Leo Stradiotti as Conference Chair, Captain Phill Nelson as Moderator and a support team that outdid themselves in keeping sessions and events well organized, this conference was successful on all accounts.

Legacy Award

Sessions

Always a favourite at CMC conferences, keynote speaker Donald Roussel, Associate Assistant Deputy Minister of Transport Safety and Security, spoke about the growth of Canada’s economy and the importance of the marine industry’s efficiency in solving the challenges that come with that growth. In addition to the increased demand for many of Canada’s resources and products, he also pointed to emerging industries like the

solutions to the challenge of lowering the industry’s carbon footprint, and rising fuel and operating costs. “Shipping is already the most efficient mode for transportation of the world’s goods,” said McClure, “but even with that distinction, the industry must continually look for ways to reduce greenhouse gases.” One of those ways, McClure suggested, was to invest in LNG-fuelled solutions.

Session Two focused on safety and those activities and technologies that assisted the industry in maintaining a high safety record. Paul Devries, BC Coast Pilots Ltd., spoke about eNavigation and marine pilotage; Dave Prince, CHS Pacific, updated attendees on CHS charting activities in the Pacific region; and Michael Lowry, Western Canada Marine Response Corporation, provided an overview of the many initiatives undertaken to strengthen ship-source spill response on the West Coast. When it came time for Robert G. Allan to give a glimpse into the future of escort and rescue towing on the B.C. Coast

Full summary and more photos online at www.bcshippingnews.com

Photo credits: BC Shipping News

This year’s CMC Legacy Award went to a well-deserving Captain Russel Cooper.

For over 40 years, Captain Cooper was a familiar face to those in the tug industry, not only through his leadership at Westminster Tug Boats Ltd. but also as a prominent contributor to the work of the CMC Board. Captain Cooper was on hand at the luncheon to receive his award.

export of LNG that required attention on many fronts. Roussel encouraged conference attendees to embrace the pace of change and continue to engage with other industry stakeholders and government to ensure success in managing a growing economy.

The first session of the conference provided a succinct overview of activities, trends and issues of importance to the B.C. shipping industry. Captain Stephen Brown, President, Chamber of Shipping of British Columbia, started the session by looking at the opportunities presented to the industry — LNG export terminals, the expansion of container terminals as well as increased resource export activities. With each opportunity however, Captain Brown also highlighted challenges and the need for the industry to pull together to address these.

Captain Brown was followed by Calum McClure, Cryopeak, and then by Glen Peters, MTU America Inc., who spoke to new technologies that were offering

Donald Roussel, Associate Assistant Deputy Minister of Transport Safety and Security with David Bradford, President, SS Master Society; (right): Captain Russel Cooper accepts the Council’s Legacy Award.

46 BC Shipping News September 2015

COUNCIL OF MARINE CARRIERS Photo credit: BC Shipping News

(which he did very succinctly), he allowed David Bradford, President of the SS Master Society, to take a few minutes to remind attendees of efforts underway to restore the SS Master, one of the oldest tugboats on the West Coast and an important part of B.C.’s maritime heritage.

Session Three of the conference was dedicated to government activities to address issues currently at the forefront in B.C. Donald Roussel again took to the podium to provide an overview of the tanker safety system in place, covering off the three-pillar approach (prevention; preparedness and response; and liability and compensation). Bob Gowe, TERMPOL Manager, Transport Canada, described the TERMPOL process and how, while it was voluntary for project proponents, it provided a comprehensive review at an early stage and demonstrated due diligence and a desire on the part of the applicant to obtain social licence. Roger Girouard, Assistant Commissioner, Canadian Coast Guard, Western Region, gave a full review of all of the proposed projects in play for the West Coast and the CCG’s many roles and responsibilities, including aids to

The organizing committee for the 21st Annual B.C. Tugboat Industry Conference are to be congratulated on a great event!.

navigation; marine communication and traffic services; icebreaking and ice-management services; channel maintenance; marine search and rescue; marine pollution response and many, many more.

Networking

Starting with the golf tournament on the first day, attendees were afforded a

number of opportunities to network and reconnect with friends and colleagues.

From an opening night reception that was packed, to a reception on board the SS Master while she was docked at Point Hope Shipyards, and a gala dinner and casino night, conference attendees and their significant others enjoyed many memorable moments.

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September 2015 BC Shipping News 47

LEGAL AFFAIRS The new limits of liability under the Marine Liability Act

By W. Gary Wharton

A Vancouver Lawyer with Bernard LLP

O

n June 8, 2015, amendments to the Marine Liability Act (“MLA”) (SOR/2014-98) brought into force in Canada higher limits of liability under the Convention on Limitation of Liability for Maritime Claims (1976) (the “LLMC”), as amended by the Protocol of 1996 (the “Protocol”).

By way of background, the ability of ship owners to limit their liability is longestablished and in English law, dates back to the Responsibility of Shipowners Act (passed in 1733). It has been stated that the limitation of a ship owner’s liability is a matter of policy, not of justice.

Limitation exists in order to promote investment in an enterprise deemed to be of general benefit to society by facilitating trade and recognizing the large capital investment required in order to be a ship owner and the risks attendant upon the enterprise.

The modern international law relating to limitation of liability stems from predecessor conventions to LLMC in 1924 and 1957, which allowed a ship owner to limit liability for property damage or personal injury (including fatalities). Under the 1957 Convention, if the ship owner could establish that the loss occurred without their “actual fault or privity” or, practically speaking, where the incident occurred as a result of the momentary error or omission of those aboard the ship without any involvement of the ship owner.

The LLMC, and subsequently the Protocol, increased the limits from the previous conventions but altered the test to break limitation by placing the burden on the claimant to show that the incident leading to the loss was caused either intentionally or recklessly and with knowledge that such loss and damage would probably result. Recent case law in Canada has reiterated that the

48 BC Shipping News September 2015

>>> Limitation exists in order to promote investment in an enterprise deemed to be of general benefit to society by facilitating trade and recognizing the large capital investment required... limit prescribed by the LLMC is “almost unbreakable” (see Peracomo Inc. v. Telus Communications, 2014 SCC 29). In AngloCanadian jurisprudence, in the long history of the test (which also exists in the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea and the International Convention on Civil Liability for Oil Pollution Damage), limitation has never been broken.

The LLMC and Protocol, as incorporated into the MLA, allows ship owners to limit their liability for claims of property damage, personal injury, and fatalities to an amount based on the tonnage of the vessel. In Canada, the Protocol limits apply, save and except for vessels under 300 gross registered tons (GRT), which have their own set limits of liability at CDN $500,000 for the aggregate of all property claims and CDN $1,000,000 for all loss of life or personal injury claims arising out of a single accident.

Since the Protocol came into effect in 2004, there have been no further amendments to the prescribed amounts of the limitations. Due to inflation and the value of currency, the value of the limitation funds have eroded over time.

In order to account for the effect of inflation and to meet Canada’s treaty obligations under the LLMC, Canada has amended the MLA to incorporate an increase in the general limits adopted by the IMO Legal Committee under Article 8 of the Protocol which provides for an amendment formula. The amendment

to the Protocol as incorporated into the MLA results in an increase of the general limits by 51 per cent but does not affect the limits previously set by Canada for vessels at or below 300 GRT. While the Regulatory Impact Analysis Statement produced by Transport Canada reiterates the principle behind ship owners’ limitation of liability as a means to attract risk capital to the shipping industry, it cites (aside from inflation) the objectives behind the current increase as being to “protect the financial interests of Canadians” by ensuring that funds are available to compensate claimants who suffer property damage, personal injury or loss of life as a result of a marine accident. Let us test that thought.

Claims in Canada, which have exceeded limitation, have only involved vessels under the 300 GRT limit, which remains unchanged and therefore unadjusted for inflation. The vast majority of vessel-related personal injury claims (not covered by workers’ compensation legislation or agreements, or covered by the Athens Convention) occur on, or caused by, vessels under 300 GRT, often pleasure vessels. Pleasure vessels also benefit from the 300 GRT limits although the principle of attracting risk capital to the shipping industry can in no way apply. It is also worth noting that there is still no regime in place for compulsory insurance for pleasure vessels in Canada, which would appear to be a primary focus if compensation for marine-related injuries

LEGAL AFFAIRS or fatalities was the primary concern.

The issue of limitation for a pleasure boat operator with no insurance and no other assets is somewhat moot.

Beyond the maritime world, the rationale of uncompensated claimants in transportation accidents as being a prime driver behind such legislative changes appears inconsistent when we still allow the drivers of cars to operate with grossly inadequate insurance limits (clearly not a federal responsibility but inconsistent nonetheless).

It is therefore hard to relate this change in the limitation regime to the need to ensure compensation for Canadians injured or killed in marine accidents. Based on past experience, it is unlikely the increased Protocol limits will be utilized in the vast majority of maritime personal injuries or fatalities, if at all, while a significant number of individuals or their dependants still face an unaltered limitation regime for pleasure boat accidents.

The increased Protocol limits which have now come into force were initially proposed by Australia following a large bunker-related incident in Queensland (the Pacific Adventurer) which resulted in damages exceeding the Protocol limits.

Following this incident, Australia proposed an increase of 127 per cent which was not adopted by the IMO legal committee who opted for a lower 51 per cent increase based on input from the shipping community and the insurance industry.

It is also important to note that (according to the international group of P&I associations who provide third-party liability coverage for the vast majority of the world’s ocean-going fleet) there have been only 20 claims worldwide between 2004 (when the 1996 Protocol came into effect) and March 2012 which have exceeded limitation under the international regime, which operates without the 300 GRT Canadian limit. Of these 20 (none of which occurred in Canada), 10 were bunker-related claims with the balance relating to cargo or property damage. The impetus for change internationally can, therefore, be seen to be initiated by and directly related to compensation for bunker spills.

Claims for bunker spill-related damage (previously limited by the LLMC and Protocol) are now specifically covered by the International Convention on Civil Liability for Bunker Oil Pollution Damage (“Bunkers Convention�), which has also been incorporated into the MLA. The 51

per cent increase also increases monies available under the Bunkers Convention as the limits and requirements for insurance are directly linked to Protocol limits.

With the failure in Canada to adjust the limits for claims for personal injury with the highest probability of occurrence, while increasing the limits for claims which are seldom reached with the exception of bunker-related spills, one can safely conclude that compensation for people injured or killed in boating accidents is not the obvious priority.

As the amendments to the MLA ignore the limitation applicable to pleasure vessels and fails to adjust the 300 GRT limit for inflation, it would appear that the government preoccupation with compensation for oil pollution is of greater concern from a regulatory perspective than compensation for claims involving personal injury or death. Given the observable public reaction to a recent local bunker spill such as Marathassa, which occurred in Vancouver Harbour on April 8, 2015, such preoccupation may be irresistible.

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September 2015 BC Shipping News 49

FERRIES Passenger vessels

Benefitting local communities across Canada

By Kristin Baldwin

Director of Communications, Canadian Ferry Operators Association

I

t’s a call that we all dread. “An emergency. Come as soon as you can.”

That was the call received by the Bay Ferries’ Princess of Acadia earlier this summer. A crew member onboard a fishing vessel had been injured and needed emergency medical assistance.

The Joint Rescue Co-ordination Centre in Halifax dispatched the ferry to perform the rescue. The individual was treated by medical professionals on board and was transferred to an ambulance when they got to shore. A fitting task for a passenger vessel that was about to be retired.

A similar event happened just over a week later on our other coast. The Joint Rescue Co-ordination Centre dispatched a rescue boat from BC Ferries’ MV Quinitsa to save a stranded kayaker from frigid waters just north of Buckley Bay.

This is an element of passenger vessel service that is often overlooked: the role they play in marine emergencies.

The crew onboard ferries in Canada are trained to respond to a host of emergency scenarios. It’s just another way Canada’s ferries are providing essential services to communities across Canada. With over 55 million passengers, nearly 19 million vehicles, and more than 260 vessels operating, our ferries have a profound impact in many communities.

Remote communities

Navigating our waterways has been an important component of life in Canada since well before the first explorers.

While infrastructure has expanded and populations have grown, there are still parts of Canada that are only accessible by travelling on a ferry. This means that

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everything to sustain a community — food, fuel, etc. — needs to be put on a vessel before it arrives at its destination. It also means that the only way tourists can come to these remote places is through a ferry. Oftentimes, ferries are also critical in emergency situations, as a way to get to a hospital.

Communities served only by ferries include: • Salt Spring Island, B.C. (BC Ferries) • Pelee Island, ON (Pelee Island Transportation Company — seasonal) • Moose Factory, ON (Ontario Northland — seasonal) Without the ferry, remote communities would be far more isolated. This is a prime example of how ferry operators are bringing us all together.

Investing in local communities

Ferries create jobs. It’s just that simple.

Across Canada, ferry operators employ over 9,000 people directly and over 22,600 people indirectly. But going even further, ferries are also paving the way for future investments.

Marine Atlantic’s new terminal in Nova Scotia is more than just a cutting-edge piece of architecture, but it also provides a solid foundation for future investment in the community and across the province.

Over the next five years, ferry operators will be investing more than $1.5 billion to upgrade and renew their fleets, and much of this work can be done here in Canada, creating even more jobs.

Learn more!

Join us in Vancouver, September 13 to 15, 2015 at the Marriott Pinnacle for our 2015 conference. This year’s theme is Cutting Edge: New Technologies in the Ferry Sector. This is an excellent opportunity for operators and suppliers to network and develop business relationships.

There are opportunities for suppliers to showcase their products, address conference delegates and meet key contacts from the major ferry operators in Canada.

To register or for more information about the work being done by the Canadian Ferry Operators Association, visit our website at www.cfoa.ca/ conference.

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September 2015 BC Shipping News 51 2015-05-07 3:35 PM

INTERFERRY CONFERENCE 40th ANNUAL OCTOBER 3 -7, 2015

•

COPENHAGEN

KEY DATES Saturday Oct. 3

Sunday Oct. 4

Monday Oct. 5

Tuesday Oct. 6

Wednesday Oct. 7

Pre-Tour #1

Carus Cup Golf Tourney Pre-Tour #2 Welcome Reception

Conference Sessions Spouse Tour #1 Networking Reception

Conference Sessions Spouse Tour #2 Farewell Dinner

Technical Tour Post Tour commences

CONFERENCE SESSIONS

SPECIAL GUEST SPEAKERS

Fire Safety • Electric Ferries • Innovation

Robert Almström – Stena RoRo, Sweden Topic: BIMCO’s New Time Charter Party for the RoPax Trade

CONFERENCE PANELS

Peter De Keyzer – BNP Parabas Fortis, Belgium Topic: Economic Outlook for the World Economy

Is There a Future for Fast Ferries?

Michael Grey – Maritime Journalist, UK

The Impact of Environmental Regulations in Northern Europe

Tim Reardon – UK Chamber of Shipping, UK Topic: Ferries and Borders

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52 BC Shipping News September 2015

MEDIA

FERRIES Landmark Interferry conference looks to the future

I

ssues including stowaway migrants, vehicle deck fires and the global economy will feature at the 40th annual Interferry conference, which takes place in Copenhagen from October 3 to 7, 2015 with an agenda shaped by headline news.

The trade association is returning to the city for the first time since 1981 for a milestone anniversary event that will provide a comprehensive update on the ferry industry’s latest solutions to decades of political and operational challenges.

Tim Reardon, the UK Chamber of Shipping’s taxation, ferry and cruise policy director, will examine the impact of border controls imposed at U.K. ports over the past decade in response to migration and security concerns — currently highlighted by huge disruption to short sea services as thousands of illegal migrants try to reach England from France. Beyond this exceptional circumstance, Mr. Reardon suggests that the new control requirements – ranging from data capture on passengers and freight to more intrusive physical interventions — present a major problem for ferry operators.

As he explains: “Almost all these controls are derived from processes at airports. They are predicated on every passenger travelling as a pedestrian and on an individual ticket that is usually booked well in advance. They do not apply easily in an environment where most passengers travel in groups in vehicles and where most freight customers require a turn-up-and-go service.”

A string of presentations on fire control has also been prompted by recent incidents. Rear Admiral Cristiano Aliperta, maritime attaché and IMO representative based at the Italian Embassy in London, is reviewing mass evacuation issues arising from the Norman Atlantic car deck fire on passage from Greece to Italy last December, which left 12 confirmed dead and 19 missing.

Interferry’s own research into previous fires has supported two key measures to optimize emergency response — improvements to fire detection systems to prevent delays caused by suspected false alarms; and frequent exercising of crew members in firefighting situations.

Conference delegates will hear similar input from Anders Tosseviken, principal approval engineer in DNV GL’s fire safety

The trade association is returning to [Copenhagen] for the first time since 1981... and life-saving section, who will question standards of safety training and vehicle deck fire-extinguishing systems.

Among technical solutions, a lightweight passive fire protection system — to contain the spread of fire within a limited area — will be presented by Javier Herbon, managing director of Australia’s CBG Systems. The company’s panelized structures have been installed on more than 70 vessels and are said to offer more convenient and efficient insulation than traditional fibrous blankets wrapped across every beam and stiffener.

Peter De Keyser, chief economist at international bank BP Paribus, will explain why the global economy remains a hot topic for the shipping community.

His outline of short and medium-term trends will reveal the factors behind recovery in Europe, volatility in the U.S. and trouble for emerging markets as growth in China slows. He will also forecast how long-term demographic changes could shift the distribution of production, trade and wealth.

A highly specific trade issue will be discussed by Robert Almström, contract manager at Sweden’s Stena RoRo, who is chairman of the BIMCO sub-committee responsible for developing ROPAXTIME, a first-ever standard time charter party for the ropax trade that was launched in June. The purpose-tailored initiative covers items such as hotel, restaurant and passenger-related issues and avoids having to use heavily amended dry cargo forms written for a completely different trade - reducing negotiation time and the risk of costly legal disputes.

The conference program also includes two panel discussions — one on environmental regulations in northern Europe and another on the future for fast ferries — together with sessions on electric ferries and technical innovations ranging from remote control ships to auxiliary wind propulsion and a stern-fitted hydrofoil-type device designed to reduce fuel consumption in wave conditions.

To find out more about the Interferry conference, visit: www.interferry.com.

maritime and commercial law on canada’s west coast Nevin Fishman Mark W. Hilton Katherine A. Arnold James Vander Woude

W. Gary Wharton David K. Jones Connie Risi Joanna R. Dawson

Peter Swanson Catherine A. Hofmann David S. Jarrett Megan Nicholls

Thomas S. Hawkins Tom Beasley Russell Robertson

associate counsel: Lorna Pawluk tel: 604.681.1700 fax: 604.681.1788 emergency response: 604.681.1700 address: 1500–570 Granville Street, Vancouver, BC, Canada, V6C 3P1 web: www.bernardllp.ca

September 2015 BC Shipping News 53

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54 BC Shipping News September 2015

Securing a bright future Westshore Terminals – North

America’s busiest coal export terminal – is amid a five-year, $270 million project to make it even better. As we work to secure a bright future over the next few years we will: a new office, workshop • Build and employee complex three of our four • Replace stacker-reclaimers which either stockpile or reclaim coal on our site our largest shiploader • Replace at Berth 1 additional dust • Install suppression systems For our customers it will mean they can plan for the future with confidence. We will have new equipment and increased coal stockpile capacity without increasing our site footprint. Every tonne of coal from train to vessel will be handled more efficiently and with improved environmental safeguards.

The changes will not come without challenges as we are a busy terminal. However, the results will prove worthwhile for Westshore and its unitholders; to our customers; and to Canada in increasing coal export revenues, and productive jobs.

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