Pleased to advise that as of this morning, 26 November, the CN Rail Strike has officially ended. A return to work protocol has been announced as operations are scheduled to return to normal starting at 0600/27 Nov (Eastern Time). The ratification of the new agreement is expected to take approximately 8 weeks, however, both the Teamsters Union and CN Management have agreed to to no further job action during this period. While details of the agreement will likely remain unknown until the official union vote has completed, sources have pointed to fatigue and overwork as factors that contributed to the strike.

While this news is certainly positive, the impact of the strike is already apparent as effected Ports have experienced a backlog of vessels. Going forward, increased waiting times for vessels loading bulk cargoes especially on the North Shore of Vancouver and the Port of Prince Rupert are to be anticipated as local terminals, suppliers and the railways work to alleviate the existing congestion. Will keep all parties advised of the situation on the West Coast of Canada as it relates to vessel operations.

Further details can be found on the CN Rail and Teamsters Union websites.

As most parties are well aware of by this point, the Canadian National Railway received a strike notice from the Teamsters Canadian Rail Conference Conductors. As of 0001 hours 19 November, approximately 3,200 railway employees have been on strike. According to the Union, the impasse mostly involves safety and work load, whereas management is claiming that the issue is centered around compensation demands from the union.

Canadian National Railway services both the Port of Vancouver and Prince Rupert. Already the disruption to rail service has had negative impacts on the fluidity of the Canadian supply chain with the potential for the strike to extend into a second week. We remind all parties that the Canadian Government is typically quick with their involvement to reach a solution, the last railway strike which involved Canadian Pacific Railway lasted 9 days in total. Canadian Pacific Railway continues to operate as normal, however, it is not uncommon for the 2 companies to share track usage so CP could experience some delays as well.

As of November 21, a federal mediator has been involved in ongoing discussions with both parties. On November 20, a new Liberal parliament and Minister of Labour was sworn in. Both the Minister of Transport and the Minister of Labour are both monitoring the situation and applying pressure for the quickest possible settlement. However, the Government is not considering back to work legislation at this time and instead is choosing to let the bargaining play out. Even if back to work legislation becomes a consideration, Parliament is not currently in session (expected back on December 5) and it would take some time.

We are aware that the majority of Canadian exporters and related associations are putting a great deal of pressure on Government to reconvene parliament and enact back to work legislation. But so far, there has been no positive response from the government.

On November 22, the Vancouver Grain Exchange voted in majority favor of the following motion –

“Pursuant to By-Law 10.01 of the Constitution and By-Laws of the Vancouver Grain Exchange, the Council of the Vancouver Grain Exchange, together with the council of the Western Grain Elevators Association, hereby confirms that an “Event of Delay” exists at the grain loading facilities on the West Coast of Canada due to a labour disruption between the Teamsters Canada Rail Conference (TCRC) and CN Rail. The event of Delay commenced at 0001 hrs ET on November 19, 2019.”

We will keep you closely advised of any and all updates on the situation going forward.

With the IMO Sulphur January 1, 2020 deadline approaching many operators are keeping a close eye on their vessel’s operations in Vancouver. We have been getting a lot of inquiries regarding what local suppliers are doing to prepare as operators plan for this eventuality. This post is meant as a follow up to our initial article, which can be found here, on what to expect going forward and what has been observed so far in the Port of Vancouver. According to the International Maritime Organization, the “limit for sulphur in fuel oil used on board ships operating outside designated emission control areas will be reduced” which will “reduce the amount of sulphur oxides emanating from ships.” In preparation of the impending regulations, local bunker suppliers are already looking ahead at how to better serve the industry.

Over the last couple of months an uptake in MGO deliveries and a reduction in the quantity of HFO supplied has been observed. This has been especially true since the end of the cruise ship season. Local bunker suppliers have noted this as well stating those vessels without retrofitted systems are increasing their intake. Alternatively, vessels that have invested in Scrubber systems designed to remove harmful chemicals and sulphur from the fuel, have continued to receive HFO. After the HFO is processed through the scrubbers it is then compliant with the 0.5% regulations for 2020. Looking ahead, local suppliers have indicated that the availability of HFO outside of cruise ship season could be limited in the Port of Vancouver. Cruise ships tend to be more active in utilizing scrubber systems so suppliers have advised there will likely be more availability during the season.

We recently approached Transport Canada about their regulations in regards to open and closed loop scrubber systems. Transport Canada requires certain details before approving the use of these systems in local waters under their jurisdiction. Some information they require includes whether or not a wash water treatment plan is used or if a viable holding tank is available on board. The appropriate class/flag approval and IAPP certificate must be sent to them as well. The authorities review all of this information and grant permission on a case by case basis. Vessels using these systems through the Strait of Juan De Fuca will also require permission from the USA authorities. Transport Canada has not yet revealed their specific procedures about how vessels are to declare the use of these systems, however, that will likely come in time. Finally, while it seems that the authorities will be permitting the use of scrubber systems it is possible that further restrictions could come into place in the future.

Existing barges that are currently used for bunkering purposes are in the process of being retrofitted. Suppliers are able to convert existing HFO tanks to handle more MGO and other alternatives which means greater quantities of these 2 fuels can be held at a given time. On the flip side, their shore-side counterparts are also transitioning their operations to ensure the guidelines and procedures are in place to maintain specs and blending requirements. In some cases, vessels  are stemming a relatively new blend of fuel, called Very-low sulphur fuel oil, suggesting that this will likely be a top contender as a replacement fuel oil going forward.