CANADIAN SHIPOWNERs ASSOCIATION

Transcription

1 CANADIAN SHIPOWNERs ASSOCIATION An Industry on the move report 2006

2 DESIGNED AND PRODUCED BY GRIFFINTOWN MEDIA INC. Canadian Shipowners Association 350 Sparks Street, Suite 705 Ottawa, Ontario, Canada K1R 7S8 Telephone: (613) Facsimile: (613)

3 table of contents Mandate 2 Environmental Statement 2 Board of Directors 3 Staff 3 Message from the Minister of Transport 4 Chairman s Message 5 President s Report 6 CSA Members Ports of Call 8 CSA At a Glance 9 Algoma Central Corporation 10 Upper Lakes Group Inc 10 Canada Steamship Lines, a division of The CSL Group 11 Groupe Desgagnés Inc 11 Oceanex Inc 12 Rigel Shipping Canada Inc 12 Seaway Marine Transport 13 Statistics 14

4 MANDATE The mandate of the Canadian Shipowners Association (CSA) is to promote an economic and competitive Canadian marine transportation industry. In keeping with this mandate, the Association supports a national policy conducive to the development and maintenance of the Canadian-flagged fleet in the inland, coastal and Arctic waters of Canada, in an effort to foster the growth of a Canadian marine transportation industry. The CSA monitors Canadian and U.S. government legislative and regulatory actions, initiatives by various international marine organizations, political trends and public policy relating to navigation, safety and the Canadian shipping environment. In addition, it conducts strategic communications and public relations campaigns. 2 REPORT 2006 CANADIAN SHIPOWNERS ASSOCIATION ENVIRONMENTAL STATEMENT The Canadian Shipowners Association and its member companies recognize their responsibility to maintain a marine transportation system that is environmentally sustainable. This will be accomplished through the application of an Environmental Management System to all facets of operations and management, ensuring the primacy of environmental stewardship. It is because marine operations take place in a sensitive environment that the Canadian Shipowners Association and its member companies are committed to developing and employing best practices and procedures that embrace continuous improvement through new technology, management principles and cooperation with government, industry and the public. The Canadian Shipowners Association and its member companies are committed to tomorrow s environment today.

5 BOARD OF DIRECTORS Mr. Greg Wight * Executive Vice-President and CFO Algoma Central Corporation Mr. Gerry Carter ** President Canada Steamship Lines, a division of The CSL Group Mr. Louis-Marie Beaulieu Chairman of the Board and CEO Groupe Desgagnés Inc. Mr. Peter Henrico President and CEO Oceanex Inc. Mr. Brian Ritchie President Rigel Shipping Canada Inc. Mr. Pat Loduca * President and CEO Upper Lakes Group Inc. Mr. Wayne Smith Vice-President, Marketing and Vessel Traffic Seaway Marine Transport Mr. Donald Morrison * President, Canadian Shipowners Association * Member of the Executive Committee ** Chairman of the Executive Committee STAFF Mr. Donald Morrison President Ms. Silvie Dagenais Secretary-Treasurer Mr. Bruce Bowie Vice-President, Operations Mr. Shane Foreman Policy and Research Manager 3 REPORT 2006 CANADIAN SHIPOWNERS ASSOCIATION

6 4 report 2006 canadian SHIPOWNERs ASSOCIATION

7 chairman s message UNAVOIDABLE CHANGE Canadian ship owners have a long and successful history. It would be easy to live in the past and assume that the future would unfold in a predictable and risk free manner. This is not, however, the mindset of the ship owners or the Canadian Shipowners Association. We must move forward, with change and progress, particularly in two areas. There is an urgent need for renewal of a significant portion of the CSA fleet but we are in a sense hindered by two interrelated issues. Firstly, our newbuild requirements seemingly cannot be met by Canadian shipyards that in years past have been responsible for building a large portion of the vessels currently in the CSA fleet. Secondly, foreign-built vessels imported into Canada for use in the coasting trade are subject to a 25% vessel import duty. This is in effect a tax that Canadian shipowners must build into their business models. In late 2006, the CSA Board of Directors proposed to the government that the vessel import duty be eliminated within three years. While this is a major policy change, it reflects the real and immediate needs of the CSA members. Change is required to ensure that the demands of Canadian industries and consumers, particularly in the Great Lakes St. Lawrence corridor, continue to be met with reliable, low cost marine transportation. Duty elimination is the most important issue facing the CSA and its members. It will shape our future in the Canadian marine transportation system. Accordingly, we will continue to work collectively as an association to achieve change. In assessing the strategic issues facing the CSA and its members, the Board of Directors acknowledged the continuing high priority of environmental issues such as ballast water, aquatic nuisance species, air emissions and pollution from ships. The CSA Environmental Statement clearly established our expectations and commitment not only as an association but also as individual members. This is not simply lip service to ensure that we are viewed in a favourable light. It is engrained as the basic approach to our environmental responsibilities within the Canadian marine community and beyond. We will continue our commitment to environmental stewardship through best management practices, technological change as well as coordination and cooperation with all levels of government. Fundamental aspects of our working and natural environment are changing. The CSA and its members will continue to adapt and also direct change that is required to ensure our continuing role in providing efficient and environmentally sustainable marine transportation. Gerry Carter Chairman 5 report 2006 canadian SHIPOWNERs ASSOCIATION

8 president s report 6 report 2006 canadian SHIPOWNERs ASSOCIATION Donald Morrison President EMPHASIS ON CHANGE To some, the world of marine transportation is known for its permanence, predictability and perhaps even status quo as ships ply traditional routes with traditional cargoes, linking industries and consumers as they have for many years. While the Canadian Shipowners fleet does fit this mold in some ways, over the past year there have been significant changes in outlook, practice and perception. FLEET RENEWAL and the VESSEL IMPORT DUTY The CSA fleet is a mix of bulkers, self-unloaders, tankers, general cargo and container vessels. Some vessels are relatively new while others, such as the self-unloaders and bulkers are on average 30 to 40 years of age and are gradually reaching the point where they need to be replaced. The challenge now for CSA members is how best to replace this expensive infrastructure. The last Canadian-built bulker was constructed in 1985 and the CSA has estimated that up to $1 Billion in newbuilds will be required in the foreseeable future. This will regenerate the CSA fleet and take us into the foreseeable future. It has become apparent that Canadian shipyards, which historically built vessels for the CSA members, are now not in a position to do so for a variety of reasons. Options for new construction lie in foreign yards but tied to that is a 25% import duty on foreign-built vessels brought into the Canadian coasting trade. This can mean taxes in excess of $12 Million per vessel. The 25% duty has been a Department of Finance tariff for many years and its possible reduction has been an integral part of the Department of Foreign Affairs ongoing bi-lateral free trade negations with several countries. The CSA had previously accepted a long-term phase out of the tariff in these free trade negotiations in order to allow CSA members to incorporate the related cost changes in their business planning and fleet renewal plans. As our changing circumstances necessitated a new direction, the CSA and its members have now called on the federal government to eliminate the import duty within three years. This may be the most crucial issue that the CSA has faced in recent years given its sheer economics and importance to future business. Every effort is being made to convince the government that this proposed change is essential for Canadian marine transportation, Canadian industry and consumers as well as for the environment. AN ENVIRONMENTAL SEA OF CHANGE Clean fuels, clean air and clean water have all taken on new dimensions over the past year. The emphasis on the environment has evolved to become a force majeur in the marine community, and rightly so. Over the past year, the CSA and its members have continued to direct time, energy and resources to ensure that our environmental responsibilities and commitment have not only been maintained but have also been forward reaching. Air emissions and the trend to low sulphur fuel will have implications for the CSA fleet, ranging from the availability of the fuel itself, particularly on the Great Lakes-St. Lawrence Waterway, to engine requirements in newbuilds. There has been a great deal of cooperation and information sharing with Transport Canada and Environment Canada in cataloguing the emissions of the CSA fleet. An effort has also been made to understand the science of emissions and the policies of governing bodies such as the IMO and the United States. Air emission accountability remains a high priority. The effort to eliminate and restrict aquatic invasive species from the Great Lakes-St. Lawrence Waterway through ballast water controls has been a major effort of the US Great Lake States, as well as the US federal government, with probable impacts on the CSA fleet. The CSA continues to work with Canadian and American colleagues, including the Lake Carriers Association, to ensure that the CSA fleet is recognized for its ballast water management practices, its distinction from foreign vessels and its limited geographical scope of operations including its unique trading routes. The United States Coast Guard is examining the impact of dry cargo residues on the Great Lakes and by natural inference, there will likely be some operational restrictions on Great Lakes shipping, including the CSA fleet. We are currently examining our best management practices and determining our footprint on this issue.

9 What has become abundantly clear over the past year or so is that environmental issues, their management and ultimate regulation have no traditional boundaries. The operation of the CSA fleet is impacted by federal and provincial legislation in Canada, United States federal legislation, individual US Great Lakes States laws as well as the codes of the IMO and International Chamber of Shipping. The CSA has dedicated more effort to becoming involved at these levels, with the goal of being more influential in the decision-making process. Closer to home, the CSA and its members have maintained their priority for the CSA Environmental Committee as well as continued active participation in the Green Marine project. PILOTAGE EVOLUTION Pilotage in Canada is a well ensconced institution that generally does not perceive a need to change. The CSA and its members have an opposite view in that practices and procedures based on the 1972 Pilotage Act need to be revitalized, taking into account the technology aboard the CSA fleet and the skills, training and experience of Canadian crews on our Canadian vessels. The CSA and its members have continued to pursue the elimination of compulsory pilotage for the CSA fleet. We have objected to unsubstantiated tariff increases put forward by the Laurentian Pilotage Authority and the Great Lakes Pilotage Authority, and will continue to do so. The CSA has welcomed and participated in the intervention by the Minister of Transport and Transport Canada to find solutions to the systemic operational and financial issues facing the Laurentian Pilotage Authority. A long-term solution is required that brings pilotage authorities and pilots into a realistic operational and commercial relationship with the CSA fleet. We will continue to work to achieve this objective. THE CHALLENGE OF THE BROADENING HORIZON The CSA focuses on representing the interests and needs of its members in relation to issues that impact their working environment. It seems that there is an ever increasing level of interest in marine transportation and a greater involvement of regulatory agencies and other interest groups in marine transportation, requiring in a greater level of CSA commitment. The CSA has maintained its due diligence in reviewing and commenting on Canadian regulatory change whether it be related to the Marine Transportation Security Regulations, the Ballast Water and Control Management Regulations, the Regulations for the Prevention of Pollution from Ships and for Dangerous Chemicals under Transport Canada or the Advanced Commercial Information requirements established by the Canada Boarder Services Agency. The same due diligence has been applied to issues such as the State of Michigan Ballast Water Permit requirements, the upcoming United Sates Coast Guard standards for ballast water discharges and the proposals to reduce air emissions beyond what is currently included in the IMO Annex VI for NOx, SOx, VOC and PMs. The ever changing challenge to remain current, to understand the science, to influence policy development and to ensure the continuing commercial and operational viability of its members is one that the Canadian Shipowners Association strives to meet. WELCOME ABOARD Mr. Bruce Bowie joined the CSA this past year as Vice-President Operations. His extensive background in marine transportation, policy, administration and operations is well suited to the future of the Canadian Shipowners Association. 7 report 2006 canadian SHIPOWNERs ASSOCIATION

10 csa members ports of call 8 report 2006 canadian SHIPOWNERs ASSOCIATION contribution to international trade Domestic trade International trade

11 CSA at a glance Fully 61 percent of CSA activity is North-South business with Canada s largest trading partner. Domestically, CSA members serve key sectorssuch as electrical generation, steel and natural resources, with economic, reliable transport of very large volume commodities. CSA members provide a vital link with Canada s Northern Communities. The Great Lakes-St. Lawrence Waterway is the largest inland waterway in the world as long as the Atlantic Ocean is wide. More than 3,740 kilometers long, this marine highway reaches into the industrial and commercial heart of North America, connecting Canadian communities and industries to the world. Canada s marine sector directly employs 93,000 people and contributes $9 billion to Canada s Gross Domestic Product. 9 report 2006 canadian SHIPOWNERs ASSOCIATION

12 Mr. Greg Wight Executive Vice-President and CFO algoma central corporation Algoma Central Corporation is the largest Canadian-flag ship owner on the Great Lakes- St. Lawrence Waterway. With assets of approximately $514 million and revenue of approximately $549 million, the Algoma Central Corporation group includes Algoma Shipping Inc., Algoma Tankers, Fraser Marine & Industrial, Algoma Central Properties Inc., and a share of Marbulk Canada Inc. and Seaway Marine Transport. Algoma Central Corporation operates vessels throughout the Great Lakes-St. Lawrence Waterway from the Gulf of St. Lawrence, through all five Great Lakes. The Corporation owns 19 Canadian-flagged dry-bulk vessels. The operational and commercial activities of the Canadian-flag dry-bulk fleet are managed by Seaway Marine Transport, a partnership with Upper Lakes Group Inc., an unrelated company. The Corporation also has an interest in one tug and one barge. The Corporation owns and manages the technical and commercial activities of four Canadian-flag petroleum product tankers and, in addition, owns a foreign-flag tanker through a wholly-owned foreign subsidiary. The Corporation also owns one ocean-going self-unloader through a wholly-owned foreign subsidiary and has an interest through a joint venture in an ocean-going fleet of five self-unloaders. These vessels are part of a 26-vessel ocean-going self-unloader commercial pool, which is the largest of its type in the world. The Corporation also provides diversified ship repair, diesel engine repair services and fabrication services to ship-owners and industrial customers through the Great Lakes-St. Lawrence Waterway. The Corporation, through a wholly-owned subsidiary, also owns and manages commercial real estate properties in Sault Ste. Marie, St. Catharines and Waterloo, Ontario. The Corporation recognizes that safety, security, quality and protection of the environment are important and are integral to a well managed company. Accordingly, all of Algoma Central s ships are certified to both ISO 9002 and ISM Code. Algoma Central Corporation is fortunate to have a dedicated and skilled workforce that exceeds 1,400 permanent employees report 2006 canadian SHIPOWNERs ASSOCIATION Mr. Pat Loduca President and CEO upper lakes group inc. Upper Lakes Group Inc. is a diversified company deeply rooted in the Great Lakes and Eastern Seaboard marine transportation industry. Headquartered in Toronto, it is an innovative Canadian company that pursues growth opportunities with entrepreneurial spirit. It owns a broad network of companies involved in or related to marine transportation and logistics, as well as other related and unrelated business activities. Upper Lakes is a partner in Seaway Marine Transport, a St. Catharines, Ontario partnership with Algoma Central Corporation. Seaway Marine Transport manages the commercial and operating activities of the partners self-unloading and gearless dry bulk fleets. Upper Lakes is also a partner in McAsphalt Marine Transportation Limited, a joint venture with McAsphalt Industries Limited. The joint venture owns a tug/barge unit capable of transporting liquid asphalt and residual fuels on the Great Lakes and Eastern Seaboard. The operating activities of the unit are managed through Provmar Fuels Inc., a fuel bunkering and tanker management company based in Hamilton, Ontario. Upper Lakes is active in the ship repair and industrial industries through its investments in Hamilton Marine Inc. and Allied Marine & Industrial out of Port Colborne, Ontario, as well as Seaway Marine & Industrial and Canal Marine out of St. Catharines, Ontario and Lakehead Marine & Industrial out of Thunder Bay, Ontario. Another investment, Lansdowne Technologies Inc. out of Ottawa, works closely with our ship repair and industrial sector, as well as providing various technology and project management related services to third parties. Through subsidiaries located in Québec City and Trois-Rivières, Québec; Thunder Bay, Ontario; Winnipeg, Manitoba and Maryland, USA, Upper Lakes operates various cargo transfer and grain storage facilities, as well as two grain trading businesses. Further west, Heritage Pointe runs the company s real estate development and golfing operations out of offices south of Calgary, Alberta.

13 The CSL Group, headquartered in Montreal, has affiliated offices in Halifax, Winnipeg, Burlington, Vancouver, Boston, Singapore and Sydney. Specializing in self-unloading bulk carriers with inland, coastal and deep sea trading capabilities, the company manages a fleet totalling 54 vessels, 36 of which are owned by CSL either fully or partially through joint ventures. Canada Steamship Lines, a division of the CSL Group Inc., is based in Montreal and manages the domestic business. Operating a fleet of 14 vessels, comprised of 10 self-unloaders and 4 bulkers, on the Great Lakes- St. Lawrence Waterway system, the company plays a major role in supplying raw materials to North American heartland industries such as steel, power generation, agriculture and construction. Canada Steamship Lines, with a major fleet renewal program that took place over the last seven years, now owns and operates the unique SeawayMax class of ships - the largest selfunloading vessels that presently transit the Seaway System. Based in Beverly, MA, CSL International Inc. manages the international shipping interests of The CSL Group. The company manages a fleet of self-unloading vessels ranging from handysize to Panamax. Specializing in the transportation of dry-bulk cargoes, the company serves customers in industries ranging from steel to construction aggregates to agriculture; providing fast, efficient and environmentally responsible shipments. While new partnerships, fleet investment projects, employee training programs and innovation through technology all reflect the pioneering spirit of The CSL Group, they also define the company s commitment to its customers on the Great Lakes-St. Lawrence Waterway and worldwide. canada steamship lines Mr. Gerry Carter President Groupe Desgagnés, whose long marine tradition dates back to the 19th century, is today projecting its image as a leader within the ranks of Canada s merchant marine with a staff that varies from 500 to 800 people depending on the season and annual turnover of some 150 million dollars. The company operates a fleet of 15 vessels ranging from 1,372 to 17,850 tonnes deadweight capacity, including tankers, all of which have double hulls, multi-purpose cargo vessels, including a Ro-Lo and a Sto-Ro-Lo, as well as a passenger and freight carrier serving the Central and Lower North Shore. The company s vessels are found primarily on the waters of the Great Lakes, St. Lawrence, Canada s eastern seaboard and the United States as well as in Canada s eastern Arctic, not to mention the other seas of the globe. Each year they carry more than 4 million tonnes of cargo, including petroleum products, miscellaneous cargoes, dry bulk, heavy packages and containers. The company also operates a fleet of cranes with a capacity of between 15 and 220 tonnes and is thus a key player in the major industrial and hydro-electric projects on the North Shore. groupe desgagnés inc. In order to offer the highest standards of quality, safety and environmental protection, the company has implemented the demanding ISM Code on its vessels. In addition, with a view to continued improvement, the company is currently enhancing its quality assurance and security systems in accordance with the TSMA Guidelines of the OCIMF and the ISO 9001:2000 standards. The fact that Desgagnés is able to offer its clients a high level of quality is attributable primarily to the talents and efforts of its highly qualified staff. This explains why the company invests large sums in training for its staff in order to constantly upgrade their skills. Similarly, it invests in new technologies so that its vessels will always have up-to-date equipment and can travel in complete safety. Over the years, the company has worked for an impressive list of clients who can all attest to its high ethical values as well as its probity and integrity and to the fact that fulfilling its commitments is what drives it forward. Mr. Louis-Marie Beaulieu Chairman of the Board and CEO 11 report 2006 canadian SHIPOWNERs ASSOCIATION

14 Mr. Peter Henrico President and CEO oceanex inc. Oceanex Inc. is a leading intermodal transportation company, providing scheduled marine service to the Province of Newfoundland and Labrador. Operating a purpose-built fleet of three icestrengthened vessels complemented by an extensive inland transportation and marine terminal network, Oceanex remains a strategic and highly competitive link to the Province from anywhere in North America. In 2006, Oceanex completed 167 sailings, carrying 86,407 TEUs and 19,585 new vehicles, compared to 86,135 TEUs and 18,743 vehicles in In October, the company purchased and commissioned a new state-of-the-art Liebherr mobile crane for its St. John s terminal. In November, the M.V. Cicero, which had been assigned to a mid-week sailing from Halifax to St. John s, was withdrawn from service and sold to foreign owners. The company continues to provide a twice-weekly service from Montreal with the M.V. Oceanex Avalon and the M.V. Cabot, and a weekly service from Halifax with the M.V. Sanderling. In 2007, the St. John s terminal facility will be increased by five acres enabling all highway trailer traffic to be handled away from core terminal activities thus improving terminal productivity. We should enjoy uninterrupted service in 2007 since there are no planned vessel dry docks until Over the years, Oceanex has developed a relationship of trust with its business partners and clients. With an encouraging economic forecast for the Province in 2007, Oceanex has the organization and infrastructure to meet anticipated market growth report 2006 canadian SHIPOWNERs ASSOCIATION Mr. Brian G. Ritchie President rigel shipping canada inc. Situated in the hub of the Atlantic Provinces, Rigel Shipping Canada Inc. operates three identical Canadian-flagged, modern, double-hulled, ice strengthened, chemical/petroleum product tankers of 10,500 cubic metre capacity. Rigel also performs the commercial management of an Isle of Man flagged, 40,000 cubic metre chemical/oil tanker owned by its German partner. Rigel Shipping Canada Inc. was created in 1993 with the entry into Canada of the sister ships MT Emerald Star and MT Diamond Star, followed by a third sister ship MT Jade Star in March The multiple grade cargo flexibility, built in safety features, and highly skilled personnel, along with ISO 9000:2001 and ISM Certification, make Rigel a leader in the Canadian liquid transportation industry. Rigel s commitment to safety of crew and protection of the environment is second to none with an emphasis on well experienced and fully qualified seagoing personnel, who receive the benefit of continually updated training programs and support in the upgrading of their knowledge and skills. The company operates a strictly controlled and enforced zero tolerance Drug and Alcohol Policy. The Rigel tankers together with other tankers owned by Canadian Shipowners Association member Groupe Desgagnés operate in the Petro-Nav pool which services the major portion of the Canadian oil industry s marine transportation requirements. The company is managed from its Canadian headquarters located in Shediac Cape, New Brunswick. Rigel Shipping Canada Inc. is part of the Rigel Schiffahrts Group of Bremen, Germany, who control twenty-seven modern oil/ chemical tankers.

15 Seaway Marine Transport is a partnership of Algoma Central Corporation and Upper Lakes Group Inc. The Seaway Marine Transport fleet of 22 self-unloaders and 12 conventional bulk carriers is the largest and most diversified fleet operating on the Great Lakes and St. Lawrence waterway. Seaway Marine Transport manages all of the marketing, traffic scheduling and commercial administration of the combined fleet of vessels of both partners and is also responsible for all ship management and vessel operating functions, with the exception of vessel crewing which continues to be managed by each partner directly. The size of its fleet, together with unique vessel configurations allows Seaway Marine Transport to accommodate almost every dry-bulk shipping requirement. Seaway Marine Transport serves a wide variety of major industrial segments, including iron and steel producers, aggregate and building material producers, electric utilities, salt producers and agriculture product producers. A wholly owned subsidiary company, SMT (USA) Inc. charters tugs and barges from Laken Shipping Corporation and manages their commercial activities. Laken Shipping Corporation is a U.S. tug and barge operation based in Cleveland, Ohio. Seaway Marine Transport s operations are certified to both the ISM code and ISO 9001:2000. SMT is committed to continuous improvement through a Quality Council and Continuous Improvement process. Our vision is to be recognized as a leader in a growing and increasingly global transportation industry by maximizing our environmental, competitive and safety advantages. Consistent with core values of integrity, responsibility, respect, leadership and teamwork, we pursue our mission to create value by providing competitive and innovative marine transportation solutions focused on customer satisfaction, safety and the environment. Seaway Marine Transport is based in St. Catharines, Ontario and has a marketing and customer service office in Winnipeg, Manitoba, that serves shippers of western Canadian and US commodities such as grain, potash and coal. SMT (USA) is based in Cleveland, Ohio. SEAWAy marine transport Mr. Wayne Smith Vice President Marketing and Vessel Traffic 4 report 2006 canadian SHIPOWNERs ASSOCIATION