With Russia’s invasion of Ukraine, the security of the Canadian Arctic has come sharply into focus. Neither Canada or the United States has the maritime assets to mount any sort of resistance to Russian encroachment on the Canadian North and is unlikely to have the means any time soon.
Casual students and observers of the marine industry, and even many of the younger generation within the industry, could be forgiven for assuming that containerization has always been with us. However, that is not the case.
Lloyd’s original Coffee House is reliably known to have been opened by Mr. Edward Lloyd on Tower Street in London in 1686 and became a centre for shipping news and intrigue. As time went by and as foreign trade grew, the exchanges matured into basic ship broking and insurance transactions but also the first vessel registers and assessments of vessel quality. From 1768 the Society used the designation a1 to indicate a ship of the highest class.
In the past month, there has been quite a lot of huffing and puffing around the need to kick start serious global shipping momentum towards decarbonization. The BIMCO CII Operations Clause for Time Charter Parties 2022 has come in for a good deal of criticism on account of widespread scepticism that charterers and owners will find the common ground to cooperate in the implementation. Equally, some owners have dismissed the whole concept of the Carbon Intensity Index on the grounds that it may actually result in higher emission levels – not less.
As the world has already learned, Russia’s war on Ukraine has abruptly turned the energy supply map on its head. The supply lines of coal, oil and gas have fundamentally shifted away from dependency by western nations on Russia as a primary supplier and the logistics of managing this change have almost overnight provided the marine industry with unforeseen challenges and opportunities.
As the world’s major container ports gradually return to fluidity following more than two years of congestion during the Covid induced consumer spending spree, the container lines are again blanking sailings and laying up ships in order to manage capacity and support spot rates. The Ningbo Containerized Freight Index (NCFI) has been steadily falling in recent weeks and the rates to ship a 40’ units out of China are now hovering around the $10,000 level while Transatlantic rates are holding at around the $6,000 level.
We have unfortunately become accustomed to the arrest of innocent seafarers when narcotics are found to have been planted on their vessels. The temptation to use shipping containers for illegal drug trafficking is obvious and while there are many successful interceptions, it’s impossible to quantify the ratio between success and failure.
In August this year, the level of deceptive ingenuity was taken to a new level when Australian border officers received a tip about a shipping container that had arrived in Port Botany (Sydney) from Canada. In the container was a 1960-era vintage Bentley with 162 kgs of methylamphetamine and 30 kgs of cocaine hidden behind the headlights. Police arrested three men and one woman, between the ages of 22 and 25, charging them with a total of 23 counts including drug offenses.
At the COP26 Conference held in Glasgow held in 2021, agroup of 19 countries agreed to work together to create zero emission shipping corridors. The declaration was known as the Clydebank Declaration for Green Shipping Corridors. The Mission Statement reads as follows:
The July agreement between Russia and Ukraine which was mediated by Turkey and the office of the U.N. Secretary General was intended to kick start a resumption of Ukrainian grain exports from the ports of Odesa, Chernomorsk and Pivdennyi which collectively accounted for about half of the country’s grain exports in the 2020-21 season. In this we must be hopeful for success, however there are several hurdles remaining.
Last month, President Biden signed into law the Ocean Shipping Reform Act of 2022 on the grounds of the need to reign in the international container shipping industry which is accused of contributing to U.S. inflation through increased freight rates. At the same time the sponsors are responding to lobbying by U.S. exporters who have been struggling to access container capacity at what they consider to be a reasonable price.
