Big news this week out of Alberta as an announcement came highlighting a rail agreement between the Provincial Government of Alberta and both Canadian Pacific Railway and Canadian National Railway. This new agreement will see up to 120,000 barrels of oil shipped per day through 4,400 new rail cars by 2020. While the Province (Alberta) is hopeful the increase in crude oil rail shipments will allow prices to boost revenue and reach international markets more efficiently, it is recognized that this is not a long-term solution. The announcement has not been well received by all parties, however, as questions regarding the capabilities of the aforementioned rail lines ability to service other sectors arises – most significantly, the agricultural industry. While steps were made to ensure ongoing service of grain suppliers in 2017 by the passing of the Transportation Modernization Act (which included the right for financial penalties in lieu of adequate service), skeptics remain doubtful that increased crude oil supply would have no negative effect on the grain industry.

The following article from the Calgary Herald summarizes the situation with the following quote from the Mark Hemmes of Quorum Corporation –

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That will cause concern amongst not only grain shippers but with all market segments (potash, coal, sulphur) who are shipping into that corridor,” Hemmes said in an email. “The onus will be on the railways to ensure that their resources grow to accommodate any additional capacity requirements.

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Time will tell if/how this new agreement will affect the rail service of other industries.

Due to the longshore collective agreement, there is currently no feasible way to pursue hold cleaning using shore sourced equipment without employing longshore labour to operate.

There are presently 2 facilities on the West Coast of Canada that can-do shore-based cleaning; Tidal Transport in Nanaimo or Seaspan in Victoria. Both facilities employ longshore labour and require the subject vessel to berth at their respective facility in order to carry out the work, however, neither company will perform on a “no cure, no pay” basis. Both companies tend to use cherry pickers and high pressure washing as their primary cleaning methods.

Because the vessel must berth at these facilities for this work, pilots, tugs and lines will be required. In addition, the cost of labour, aforementioned equipment and subsequent water disposal make it almost impossible to perform hold cleaning for much less than a total cost of approximately $100,000 to $150,000 CDN.

Due to the high costs, we have not arranged this service in many years. Most of the time, it makes more financial sense to let the vessel remain idle at anchor and perform the hold cleaning (even days at a time) because of the low freight market. Typically, the off-hire time is less expensive than the total cost of employing shore side cleaning services.

Alternatively, there is a shore-based facility that operates in Tacoma and Portland, USA that most owners will use in case they need to do hold cleaning (perhaps for AQIS inspections) before coming to Vancouver. From our experience, these companies have agreed to operate on a ‘no cure, no pay’ basis although it would be worth researching further before committing to this plan of action. Historically, prince per hold is usually around $10,000 USD per hold. As you can see, this is much more economical than operations available in the West Cost of Canada. An agent in the Pacific North West region of the USA would be able to supply further details about this if required.

From past experience, most of the vessels that are not successful in their inspections within Western Canada for potash and grain usually only fail because of small amount of cargo residues in the deck beams or behind frames/stiffeners. Depending on the crew/cleaning required, it can be fairly easy to rectify these trouble areas while idle at anchor within 1-2 days.

If further assistance is required or you may have any questions not addressed in the above, please feel free to contact one of our agents at colley@colleywest.bc.ca and we would be pleased to assist.

The Port of Vancouver along with the Government of Canada have come to an agreement with the Canadian National Railway on Thursday, February 14, 2019 to improve rail infrastructure on the South shore of Vancouver Harbour. The project which will increase the rail track by double along a four-kilometre area is an endeavor to enhance the rail capacity and efficiency. No timeline has been advertised at this point. For more information, visit the Canadian National Railway website.

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By building a second track, CN will create more rail capacity, allow for a better flow of rail traffic in and out of the port, and improve efficiencies in the supply chain.

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The announcement comes amidst calls for improvements to grain railway capacity from grain exporters. While small improvements like this project to double track on the South Shore of Vancouver are beneficial, much larger investments in capacity across Canada will be necessary to meet the demand of exporters. Specifically, the Western Grain Elevator Association is calling for “financial consequences for poor rail performance” along with “[designating] grain transportation as an essential service during labour disputes” among others.  Visit this article from www.manitobacooperator.ca or the WGEA website for more details.

As the Winter season is coming to an end, we thought it pertinent to provide an update to all interested parties on the entry requirements in regards to AGM reporting. As the definitive authority on the matter, the Canadian Food Inspection Agency (CFIA) will resume monitoring the reporting and subsequent inspections of vessel’s entering Canadian waters during the ‘high risk period.’ This period will begin on March 1, 2019 and continue through to September 15, 2019 for ports located in Western Canada (March 15, 2019 – September 15, 2019 for Eastern Canadian ports).

Please note the following reporting procedures –

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The Master of a marine vessel arriving during the AGM risk period for Canada which has visited a port in a regulated areas during the specified risk periods listed in Appendix 1 in the current year or in the year immediately preceding the current year must provide to CFIA, either directly or via the vessel’s Canadian agent:

• a summary of the ports called upon by the vessel for the past 2 years; and
• a copy of a Phytosanitary Certificate or other approved certificate(s) (a list of recognized sources of phytosanitary certificates and pre-departure inspection certificates is provided in Appendix 4).

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For vessels that have called on a regulated port during the ‘high risk period,’ inspections by CFIA authorities are likely (although not guaranteed). These inspections typically will take place during a scheduled pre-loading inspection boarding; however, they may also occur unannounced alongside a terminal depending on inspector availability.

Regarding non-compliance, the CFIA has issued the following –

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4.1 Certification

A vessel without the required certification under Section 2.1 may not be permitted entry into Canada unless:

• an inspection by the CFIA at a designated offshore inspection site is conducted, and
• the inspector is satisfied that the risk of introducing AGM has been mitigated.

If the vessel is permitted entry, the vessel will be considered non-compliant during the entire stay in Canada and vessel movements will be regulated by the CFIA while the vessel is in Canadian waters. The vessel may be subject to additional enforcement action. A vessel calling on a Canadian port for a second time without the required certification may be refused entry to Canada.

4.2 Infestation

Upon inspection, if an inspector is not satisfied that the risk of introducing AGM has been mitigated, the vessel will be ordered out of Canadian waters and refused entry for up to two years during the AGM risk period for Canada or until the ship meets the requirements specified in Section 2.1. The vessel may also be subject to additional enforcement action.

At a CFIA inspector’s discretion, a vessel that has been ordered out of Canada or the U.S. due to the presence of AGM may be permitted to conduct a thorough cleaning of all life stages of AGM outside Canadian waters. Once cleaning is complete, the vessel may be allowed to return to Canadian waters for re-inspection at a designated offshore inspection site. If an inspector is satisfied that the risk of introducing AGM has been mitigated, the vessel may then be allowed to proceed to a Canadian port.

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For more information, please click here.

The British Columbia Maritime Employers Association (BCMEA) and the International Longshore Workers Union (ILWU) Local 514 have been in bargaining since the present collective agreement covering the West Coast of Canada expired in March 2018. Talks are not going well and have broken off.

We remind all that historically the Federal government does not have an appetite for enduring a strike or lock-out therefore we are optimistic that the Federally appointed mediator will be fairly influential. The Port of Vancouver is a fundamental backbone of the Canadian economy. Any strike or job action is usually short lived.

Please see below update received on January 28 from the BCMEA which is self-explanatory:

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UPDATE: Current status on bargaining with ILWU Canada Longshore and ILWU Ship and Dock Foremen Local 514. Longshore Bargaining After five (5) days of consecutive meetings last week and despite best efforts key issues remained unresolved between the Parties. The parties, however, reached agreement to file a joint notice of dispute with the Minister of Labour who will now appoint a conciliation officer to the on-going contract renewal discussion. That notice was filed on Friday, January 25, 2019. Note, the Minister has up to 15 days to appoint a conciliation officer.

The filing of this joint notice of dispute triggered the following time line under the Canada Labour Code: Applying the time line above to a calendar means the 21st day following termination of conciliation will be Wednesday May 01, 2019. During the 21-day period either party can issue 72 hours strike or lockout notice provided they satisfy the requirements of having held a vote and received a mandate from the majority who voted. We remain cautiously optimistic that the parties will achieve a renewal agreement with the assistance of the Federal Mediation & Conciliation Services (FMCS). Foremen Bargaining Dates have been scheduled for early February to meet with ILWU Ship and Dock Foremen Local 51

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On January 25 joint notices of dispute were filed by both parties – the British Columbia Maritime Employers Association (BCMEA) and International Longshore Workers Union (ILWU) at which point talks had effectively broken down. As of today, February 19 – the Minister of Labour appointed Ms. Kathy M. Peters as Conciliation Officer whose goal is to facilitate a renewal collective agreement. Hopefully this is a sign of progress to come.

Nearly a week after the derailment, Transport Canada’s Transportation Safety Board (TSB) continues their ongoing investigation. Two TSB investigators remain at the site collecting further data/collecting interviews while two other TSB investigators conduct research at their Calgary office. As per the open investigation report the next steps include –

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On site, we will continue to:

• collect data from the accident site,
• collect any available electronic data from the 3 locomotives,
• conduct interviews,
• examine and photograph the wreckage, and
• identify components for further examination by the TSB Engineering Lab.

In addition, we will examine:

• weather conditions and the railway’s winter operating plan,
• train operations specific to the Field Hill,
• operational policies for mountain grade train operations,
• railway training specific to the reliability of air brakes in extreme cold temperatures
• maintenance history of the rolling stock, and
• regulatory requirements.

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According to Canadian Pacific, the mainline running through Field, BC (site of the accident) has since been reopened as of 6 February and is complying with the TSB safety recommendations. In addition, the Minister of Transport has issued an order under the Railway Safety Act mandating the use of hand brakes for trains stopped on mountain grades. The order comes after the finding by the TSB that the CP train 301 did not have hand brakes engaged at the time of the incident.

While the incident certainly effected the rail schedule across Western Canada in the last week or so, it seems that congestion is beginning to ease as crews deal with the removal of damaged rail cars and equipment.

On February 4, 2019 the Canadian Pacific train 301 was involved in an unfortunate incident which resulted in the death of 3 Canadian Pacific employees. The derailment of 99 grain cars and 2 locomotives occurred in the interior of British Columbia is currently under investigation by the Transport Canada Transportation Safety Board (TSB). Although no official cause of the incident has been identified at this time, TSB officials have noted that the train was travelling beyond the maximum speed designated for this particular area of track. In the coming days, the TSB will continue to collect data, conduct interviews, and examine evidence in order to determine the ultimate cause of the accident.

Please note the following investigation report from the Transport Safety Board (https://www.tsb.gc.ca):

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WHAT WE KNOW

• The train was a (distributed power) unit grain train composed of 112 covered hopper cars and 3 locomotives.
• The 3 locomotives were positioned at the front, middle and rear of the train.
• Following the derailment, only 13 cars and the tail end locomotive remained on the track.
• The lead locomotive and some of the cars derailed on a curve prior to a bridge.
• The lead locomotive came to rest on its side in a creek.
• A number of derailed cars came to rest on an embankment.
• The remaining cars, including the mid-train remote locomotive piled up behind.
• The accident took place between the Upper and the Lower Spiral Tunnel near Field, BC

PROGRESS TO DATE

The investigation team has conducted the following information-gathering work:

• Preliminary indications are that a loss of control of the train occurred.
• The train had been stopped with the air brakes applied in emergency at Partridge, the last station prior to the entrance to the Upper Spiral Tunnel.
• A change off between crews had occurred at this location as the previous crew were closing in on their maximum hours of service.
• The occurrence crew had just arrived and boarded the train but were not yet ready to depart. The train had been stopped on the grade, with the airbrakes in emergency for about 2 hours when the train began to move on its own.
• There were no hand brakes applied on the train. The train then accelerated to a speed well in excess of maximum track speed of 20 mph for the tight curves and steep mountain grade and the train derailed.
• Locomotive event recorder data from the lead locomotive has not yet been obtained as the lead locomotive was severely damaged in the derailment.
• Some data has been recovered from the tail-end remote locomotive and work is under way to obtain data from the mid-train remote locomotive.
• The investigation will determine how and why the loss of control took place

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While the derailment’s effect on cargo arrival into the Port of Vancouver is not currently clear, it is expected that there will be at least some minor disruption to the scheduled rail delivery over the coming weeks as Canadian Pacific works to clear the accident and effected railways.

With the cold weather finally hitting the West Coast of Canada, we thought it necessary to pass along information reminding our customers of the complications that can arise this time of year. Please see the following provided by a local fumigation company:

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Federal / Provincial Regulation: Minimum of 5 degrees Celsius (this is the Law, and as such unbreakable).

This Regulation is important as it directly affects Crew / Vessel Safety. The concern being if the temps are below 5 degrees C, it will inhibit (slow down) the ability of the Aluminum Phosphide pellets to react with the ambient moisture and release Hydrogen Phosphide (PH3 – Phosphine Gas). This then does not ensure that adequate gas levels have built up to confirm that there is no possibility of leakage into the Superstructure (ie Engine room / accommodation spaces) or other areas commonly inhabited by the crew. Thus, rendering the 24 hours at anchor unreliable / inadequate.

It also can impact the efficacy of the fumigation.

Again, please recognize that while this is a Federal Regulation, it is first and foremost a safety issue. We have a number of ships each year where fumigant gas finds its way into the engine room / accommodations.

As ever, communication will be key. If we encounter severe cold weather, I will always advise you first of the situation, then advise agents accordingly. On some occasions, it can be a close call. In these situations, you will be advised early of the potential to cancel / delay the fumigation, then we will monitor the situation closely (ie. grain temps during loading and forecast info) and update regularly. If it comes down to the wire we will ask the agent to reserve an anchorage but to also book a sea pilot. This affords us the flexibility to hedge our bets but not incur any unwarranted costs (unavailable anchorage or Sea Pilot).

We will be monitoring temps (both ambient air and grain) as vessels near completion. Of course, I will use every means at my disposal to make the fumigation happen in a timely fashion. The good news is that the cold weather is not expected to last for too long.
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Early in the morning of January 28, 2019 the M/V Ever Summit was involved in an incident while making her berthing approach at Global Container Terminals Vanterm dock. The vessel made incidental contact with one of the shore side gantry cranes causing the crane to collapse and come to rest on top of the M/V Ever Summit. The Port of Vancouver was quick to mandate a 500-meter exclusion zone around the vessel following the incident in order to minimize vessel traffic and to create vacancy for two floating cranes to be brought in to assist with the repairs.

While there were minimal effects on the rest of the Port, Alliance Grain Terminal has had to keep the East berth empty since the incident in order to comply with the exclusion zone (which has since been reduced to 100-meters). The terminal is expecting the East berth to reopen on February 5th assuming the work by the two floating cranes is completed on schedule.