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www.canadiansailings.ca September 30, 2013 Publications Mail Agreement No. 41967521 FEATURE

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www.canadiansailings.ca

September 30, 2013

Public

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FEATURE

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2013 PUBLICATION SCHEDULE

PUBLICATION DATE NO PUBLICATIONRevised 08/12/2013

PUBLICATIONS MAIL AGREEMENT NO. 41967521RETURN UNDELIVERABLE CANADIAN ADDRESSES TOGREAT WHITE PUBLICATIONS INC., 185, AVENUE DORVAL, BUREAU 304, DORVAL, QC H9S 5J9

email: [email protected]

printed by

P U B L I C A T I O N S I N C .

GREAT WHITE

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Contributing Writers

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Halifax Tom Peters

Montreal Brian Dunn, Julie Gedeon

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Toronto Jack Kohane

Thunder Bay William Hryb

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September 30, 2013 • Canadian Sailings • 5

The contents of this publication are protected by copyright laws and may not be reproduced,

in whole or in part, without the written permission of the publisher.

43 Career Centre

46 Index of Advertisers

47 Upcoming Events

SHIPPERS’HANDBOOK

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A R T I C L E S

R E G U L A R F E A T U R E S

CONTENTS

36

11

7Port Metro Vancouver focuses ongateway growth

India’s Minister of Steel meetswith B.C. officials

Port Metro Vancouver invests inGateway Improvement Program

42CN to support Halifax Gatewaygrowth

45OOCL releases financial results

September 30, 2013

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September 30, 2013

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FEATURE

7 Managing gateway growth a key focus for Port Metro Vancouver

9 Gateway improvements progressing

11 Container Capacity Improvement Program laying groundwork for further growth

12 Reliability initiatives boost supply chain efficiency

19 Cruise volumes reflect consistent service and facility improvements

20 Air emission reductions among key environmental programs

36 Coal in the spotlight as B.C. officials meet with India’s Minister of Steel

38 Irving Shipbuilding invests $300 million in Halifax Shipyard

Modernization Program

38 Canadian rail operators to continue to reduce locomotive emissions

39 Irving Shipbuilding’s NSPS Facility Modernization Program

39 Tracey Raimondo recipient of 2013 CITT Award of Excellence

40 Richardson invests $40 million to enhance western Canadian network

41 Ocean carriers continue to become asset lighter

42 Claude Mongeau: CN’s business agenda supports growth of Halifax gateway

43 Drewry’s Top Ten Global Terminal Operators

45 Market imbalance upsets OOCL stability as box carrier sails into the red

45 CMA CGM reports Q2 results

46 FedEx reports first quarter results

46 Seaport industry to gather in Florida for AAPA’s 102nd Annual Convention

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Fold to

Fold to

VANCOUVER

SHANGHAI

DALIAN

KAOHSIUNG

SHENZHENHONG KONG

TOKYO

YOKOHAMA

BUSAN

Port Metro Vancouver is already close to

Asian markets. And with unprecedented

infrastructure investment in our gateway,

we’re getting even closer.

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.

As a result, we’ve taken up to 3 days

out of your supply chain. That brings

your goods closer to market and you

closer to your customers.

is better.Closer

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September 30, 2013 • Canadian Sailings • 7

Managing gateway growth a key focus for Port Metro Vancouver

Over the past year, the scale of activityat Port Metro Vancouver hasreached unprecedented levels, with

throughput volumes consistently exceedingforecasts and numerous major infrastructureimprovement projects underway in the Van-couver Gateway.

Port Metro Vancouver had a strong2012 having handled 124 million tonnes ofcargo by year-end. Record levels of containerand bulk volumes moved through the Port,with container volumes reaching 2.7 millionTEUs, an impressive eight per cent jump over2011. Bulk volumes reached 83.7 milliontonnes, with growth seen in metallurgicalcoal in particular. Breakbulk throughputreached 16.7 tonnes, with significant growthalso seen in the numbers of automobiles andcruise passengers moving through the Gate-way. Continued growth is forecast for 2013,with mid-year results already indicatinganother record-setting year. As of June, totalthroughput has reached 66.4 million tonnes,a six per cent growth over the same six-month period last year.

The economic effects of this burgeon-

ing trade on the Lower Mainland and acrossCanada were measured in the 2012 PortMetro Vancouver Economic Impact Study,released in June 2013. The study shows thatmore than $475 million worth of cargo ishandled through the Port every day, generat-ing more than 98,800 jobs nationwide, with38,200 direct jobs created in B.C. alone.Most striking to Robin Silvester, Presidentand Chief Executive Officer of Port MetroVancouver, is the finding that 19 per cent ofthe goods (by value) in Canada wereshipped through this gateway.

“That, and the number of jobs thatwere shown to come out of port-relatedactivities, and at a wage that is well abovethe average Canadian wage, surprised evenus,” Silvester says. “The economic impactdata highlights the significant role ofCanada’s largest gateway to the Asia-Pacific.”

Providing Gateway Capacity

The continued growth in cargo vol-umes is driving the need for greater capacityand efficiency in the Port’s supply chain. Aspart of an unprecedented $9 billion in infra-

structure investment in the Gateway, 17projects are either completed or underwayin the Port’s three trade areas. This is inaddition to an expansion of existing con-tainer capacity through the DeltaportTerminal Road and Rail Improvement Proj-ect and the proposed construction of a newcontainer facility at Roberts Bank.

According to Silvester, co-operation hasbeen a key element of the past decade’sinvestment in the Gateway’s supply chainand related infrastructure.

“I think the differentiator has been theway all of the stakeholders have collabo-rated to create capacity and efficiency,”Silvester says. “We’re seeing it among alllevels of government, the Port, terminals,railways and other stakeholders, as well aspeople in the communities impacted bythese developments. We’re also seeing col-laboration in terms of day-to-day use of portfacilities, with everyone working together tooptimize our collective competitive advan-tage through the supply chain initiatives.”

The participation of Port Metro Van-couver’s industry partners in planning for

Continued growth is forecast for 2013,with mid-year results already indicatinganother record-setting year.

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8 • Canadian Sailings • September 30, 2013

growth is evident in the handful of tenant-led projects proposed over the past year,many of them designed to provide addedcapacity and/or increase the efficiency oflandside operations. Permitted projectsinclude upgrades at North Vancouver’s Nep-tune Terminals to install a new stackerreclaimer, expand the terminal’s coal hand-ing capacity and to build new phosphaterock storage and handling facilities. Otherpermitted projects include works at WestCoast Reduction to facilitate an increase incanola capacity as well as grain storagecapacity improvements at Richardson Inter-national.

The heavy investment in Port MetroVancouver’s infrastructure and supply chainefficiency, as well as its strategic location rel-ative to fast-growing Asian markets, has

certainly caught the attention of the world-wide commercial shipping business. Newthis year, United Arab Shipping Companyhas started calling on Port Metro Vancouver.

“It’s part and parcel of the growthwe’re seeing,” comments Silvester. “Wenow have 19 of the 20 largest shipping linescalling at our Port. It’s a reflection of the factthat we really are a major hub.”

Port Metro Vancouver has also beenworking with representatives of Fraser SurreyDocks and Western Stevedoring to look atgrowing project cargo import opportunities.The Port is the closest gateway to the intenseactivity related to the Alberta and B.C. energyproject sectors, offers cost competitive trans-portation rates and has dedicated terminalswith expertise in handling imported steel,machinery and project cargo.

Defining a Sustainable Gateway

A sustainable environment and strongeconomy are not mutually exclusive. Bothin the Lower Mainland and all acrossCanada, it is important to maintain the bal-ance between them. With predictions fromseveral different economists that containertraffic on Canada’s west coast is going tocontinue to increase, Port Metro Vancouveris working hard to determine how it canbest facilitate and manage growth in tradeover the longer term.

The Port 2050 process, completed in2011, defined the anticipated parameters ofthe future world in which the Port will beoperating. The outcomes of the Port 2050process will guide future business priorities,

shape new initiatives and ultimately trans-form every aspect of Port Metro Vancouver’soperations.

As part of this transition, work is nowunderway to plan how to manage PortMetro Vancouver’s physical assets in a waythat supports growth within that context,through updating its Land Use Plan. TheLand Use Plan has a third round of stake-holder consultation scheduled for early2014 and completion slated for mid-2014.The update will lay out the policy guidelinesand intended development directions guid-ing land-use planning for decades.

A key consideration in the planningprocess has been the declining industrialland base, with more than 3,000 hectareslost to commercial and residential develop-ment over the past two generations. Whileoptimizing the efficiency and usage of exist-ing port-related property is essential, there isgrowing interest in the creation of an indus-trial land reserve.

“We have this great opportunity tocreate jobs and benefit from trade becausewe are at the centre of the global shift oftrade from Europe to Asia,” says Silvester.“But if we don’t preserve the land to allowus to capitalize on it, we’ll miss out.”

Work has also begun on developing aSustainability Vision to explore what a sus-tainable Gateway looks like and help us planfor the future. The Port has long factoredsustainability into its goals and operations.In fact, the Port’s work in sustainability,ethics and environmental governance wasacknowledged through receipt of an Hon-ourable Mention at the Canadian Society ofCorporate Secretaries’ first annual Excel-lence in Governance Awards in August2013. The Port additionally publishes anannual Sustainability Report to GlobalReporting Initiative B+ level standards.

Port Metro Vancouver is looking toextend this approach well into the futurethrough the preparation of the SustainabilityVision, which is currently being developedwith assistance from an advisory panel, con-sisting of a cross section of gateway leaders.Public consultation will begin in the fall.

The objective of the process is to definewhat a sustainable gateway looks for theorganization and to develop a framework forintegrating this vision into business, strategyplanning and daily operations.

“What we’re trying to do is encapsulatesustainability in a way that the organizationcan use readily, every day, as part of what wedo,” says Silvester. Work on the vision will becompleted in early 2014.

Port Metro Vancouver handlesapproximately one-fifth of Canada’stotal trade by value, generating morethan 98,800 jobs nationwide.

British Columbia’s Railway

www.sryraillink.com

Southern Railway of British Columbia Ltd.2102 River DriveNew Westminster, BC

Contact: Gerald Linden, Director Business Development (604)-527-6316

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September 30, 2013 • Canadian Sailings • 9

Gateway improvements progressing

To capitalize on Port Metro Vancouver’s increasingly strategiclocation within the global supply chain, an unprecedentedinvestment in infrastructure development is being made in the

Vancouver Gateway’s transportation corridor and port-related lands.Through the Gateway Improvement Program (GIP), Port Metro

Vancouver and its partners are leveraging and extending provincialand federal funding. The GIP is a $717 million capital investmentthat targets supply chain improvements along the rail and road corri-dors within three trade areas: North Shore, South Shore and theRoberts Bank Rail Corridor.

“The opportunity we have, at this time, to enhance efficiencyof traffic flow across the Gateway is incredible,” says Cliff Stewart,Acting Vice-President of Infrastructure Delivery at Port Metro Van-couver. “Industry, governments and other stakeholders are inagreement that the value of what we’re each getting out of theseimprovements far exceeds the cost that each of us is putting in.”

Project Updates

Crews are hard at work in the North Shore Trade Area, whichwill next year see the completion of the $100 million Low LevelRoad Project, of which nearly $32 million has been contributed byPort Metro Vancouver and industry partners. The Low Level RoadProject, led by Port Metro Vancouver, provides significant improve-

ments to the east-west connector that will streamline traffic move-ments, provide space for additional rail capacity, address safetyconcerns and reduce noise in the local community by closing threeat-grade rail crossings.

“Everyone gets value in this project,” says Stewart. He adds thatthe project is currently on budget and schedule, with completionscheduled for the fall of 2014.

Work is well underway on the two projects designated for theSouth Shore Trade Area, representing an investment of $127 million,of which $58 million was contributed by the Port and industry part-ners. One of the two projects is the $75 million South Shore CorridorProject, led by Port Metro Vancouver, which includes construction ofan elevated roadway along Stewart Street that spans 10 of 14 at-graderail crossings, as well as construction of a pedestrian overpass. Thefoundations and steel girders for the elevated roadway are now inplace and the elevated roadway is expected to be open by the end of2013, with remaining construction expected to be complete inSpring 2014. Once completed, the improvements will allow for theuse of longer trains and provide space for additional rail capacity. Theelevated structure will significantly reduce traffic congestion and pro-vide better access to South Shore terminals and facilities.

“The days of trucks being held up by trains are coming to anend,” Stewart says.

An artist’s rendition of theStewart Street Elevated Road,a two-lane elevated roadwayspanning 10 at-grade railcrossings.

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TERMINAL UPDATESMajor investments to further enhance infrastructure in

the Vancouver Gateway are already underway or in the

planning stages. The Port’s terminals operators have

also been undertaking various projects over the past

year in order to create an ideal environment for busi-

ness growth.

DP World Vancouver

Centerm was the first to introduce a short-sea shipping

service between its terminal in Vancouver and Duke Point

on Vancouver Island, which increases the efficiency of

the logistics chain for our customers. And by setting up

the first full container operation on the Island, we’re

giving them direct access to the market on the Island.

Maksim Mihic, General Manager

Fraser Surrey DocksFraser Surrey Docks work closely with our customers and

the Port to create forward thinking and progressive solu-

tions to cargo movements. We constantly look at the

trends and changes in the marketplace to ensure we are

positioning our services to support the requirements of

the future.

Bill Wehnert, Vice-President, Sales and Marketing

TSI Terminal Services Inc.TSI Terminals Services Inc. continues to expand inter-

modal capacity and make substantial investment in

terminal equipment upgrades with the recent purchase of

a RTG (rubber tire gantry) crane at Deltaport and a new ter-

minal operating system implemented at Vanterm in April.

Our service-level agreements and continued collaboration

with supply chain partners illustrates our commitment to

meeting our customers’ needs as a competitive and reliable

service provider.

Eric Waltz, President

Projects within the Roberts Bank Rail Corridor are all proceed-ing on schedule and on budget. Port Metro Vancouver contributed$50 million in prefunding towards the total investment of $307 mil-lion. All but one of the nine projects involve grade separations thatwill reduce the impact of train traffic on roads, allowing for smootherflow of commercial and local vehicle traffic within this busy transitcorridor. The 232nd Street Overpass Project in Langley, being deliv-ered by the Port, involves construction of a $25 million two-laneoverpass that will improve local traffic flow by eliminating an at-gradevehicle crossing and allow rail lines to run longer trains where theycouldn’t before.

“Work is proceeding well and we’re on target to complete inSpring 2014,” Stewart says.

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September 30, 2013 • Canadian Sailings • 11

Container Capacity Improvement Program layinggroundwork for further growth

Container traffic is a rapidly growing trade sector in the PacificGateway, with current volumes expected to double over thenext 10 to 15 years and nearly triple by 2030. To ensure that

there is sufficient capacity to meet forecasted Canadian volumedemands, Port Metro Vancouver is moving forward with its Con-tainer Capacity Improvement Program (CCIP). The CCIP currentlyincludes two projects that will provide the infrastructure improve-ments as they are required in Vancouver.

One of the fundamental components of the project developmentwithin the program has been the consultation between the Port, itsindustry partners, stakeholders and local communities.

“We are using best practices in consultation on these projects,”says Cliff Stewart, the Port’s Acting Vice-President of InfrastructureDelivery. “Not only are we following standards under the Environ-

mental Assessment Act, but we’re going above and beyond theserequirements by doing additional consultation. This is vital given theprogram’s mandate to explore ways of optimizing existing infrastruc-ture before constructing anything new.”

Deltaport Terminal Road and Rail Improvement Project

Work has already begun on the Deltaport Terminal Road andRail Improvement Project (DTRRIP), the first of the CCIP projects tobe constructed. Designed to improve existing infrastructure atRoberts Bank, this project will increase Deltaport terminal’s containercapacity by 600,000 TEUs to 2.4 million TEUs. Port Metro Vancou-ver, along with the Province of British Columbia and Deltaportoperator, TSI Terminal Systems Inc., are working together to make

changes to terminal access, on-terminal handling equipment, railimprovements and track configuration, as well as changes to themain roadway accessing the terminal.

“We want to make sure we’re getting the most out of existingterminals before we start building a new one,” Stewart says of theproject.

Construction crews are currently working on the new causewayoverpass, with expected completion in late 2014. The remainingproject components, including rail improvements and terminal recon-figuration, are expected to be completed as required to meet demandby 2016.

Roberts Bank Terminal 2

The second CCIP project is a proposed new three berth con-tainer terminal at Roberts Bank. Port Metro Vancouver has alreadybegun an extensive public consultation process, starting with pre-consultation in 2011. This multi-phase consultation program willcontinue alongside the environmental assessment review process,which will be carried out by provincial and federal environmentalregulatory agencies over the next several years.

“The Port is taking responsibility for obtaining environmentalapprovals for the project and we expect those to be in place by mid2017 or sooner,” says Stewart.

Port Metro Vancouver expects to launch their third round ofpublic consultation in October 2013, with pre-design consultationasking industry and communities for feedback about habitat mitiga-tion, truck traffic considerations and community legacy benefits.

Port Metro Vancouver expects to bring together the terminaloperator, the design/build team and financing aspects of the projectover the next few years, and begin construction as soon as possible,subject to environmental approvals.

An artist’s rendition of the Deltaport Terminal Road and RailImprovement Project, an efficient and cost-effective plan toincrease container capacity through improvements toexisting port infrastructure at Roberts Bank.

GLOBAL IMPORT/EXPORTCONSOLIDATION SERVICE

AGENTS FOR:

MONTREAL

Tel: 514-871-1033Toll Free:

1-800-501-1770

[email protected] www.gillship.ca

TORONTO

Tel: 905-362-5500Toll Free: 1-800-501-1780

VANCOUVER

Tel : 604-637-1043Toll Free: 1-877-501-1790

- GLOBAL FCL NVOCC

- FCL/LCL IMPORT/EXPORT ICELAND

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12 • Canadian Sailings • September 30, 2013

Reliability initiatives boost supply chain efficiency

Port Metro Vancouver is very fortunateto have strong partners in both the Gov-ernment of Canada and the Province of

British Columbia. The investments and policyinitiatives implemented by the federal andprovincial governments have not only dra-matically improved Canada’s west coast tradeinfrastructure and logistics flow but have alsogreatly enhanced Canada’s competitive posi-tion internationally.

Since 2005, an unprecedented $22 bil-lion of public and private sector money hasbeen invested in projects across B.C. – proj-ects designed to move people and goodsfaster and more efficiently than ever before.This includes projects such as Roberts BankRail Corridor grade separations, South FraserPerimeter Road and Deltaport TerminalRoad and Rail Improvement Project.

These investments are being noticedand valued by customers in fast-growingeconomies like China, Japan and South

Korea, Port Metro Vancouver’s top-three trad-ing partners, who, in 2012, accounted foralmost two-thirds of its total cargo volumes.

The results of these investments over thepast few years have been tangible – increasedimports and exports, record volumes in con-tainers and bulk cargoes and shipping linesmaking Port Metro Vancouver their gatewayof choice to North America. Nine billion dol-lars has been spent on gateway infrastructurein the Vancouver Gateway alone.

“While these infrastructure projects are agreat foundation for continued growth in theGateway, it’s important for both the Gatewayand our commercial partners that we use theassets that we have as efficiently as possible,”says Peter Xotta, Vice-President of Planningand Operations at Port Metro Vancouver.

Recognizing current operationalimpediments to supply-chain efficiency andfluidity, the Port in collaboration with indus-try partners has launched a number of

reliability initiatives involving labour, rail,marine vessels and the drayage sector. Signif-icant progress has been made on theseinitiatives over the past year, with measure-able improvements in performance resultingin greater stability and consistency of serviceprovided to the Port’s customers.

Labour Stability

Five years remain in two unprecedentedeight-year collective labour agreements, thefirst signed between the B.C. MaritimeEmployers Association (BCMEA) and theInternational Longshore and WarehouseUnion (ILWU) Canada and the secondbetween the BCMEA and ILWU ForemenLocal 514.

“This signals a different approach,”says Xotta. “These agreements are a clearrecognition that stability in the supply chain,particularly labour stability, is important forus to move forward and grow the Gatewayas successfully as we have.”

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September 30, 2013 • Canadian Sailings • 13

Co-ordinating Services Shows Results

In the past few years, Port Metro Vancouver has entered into co-operation agreements with CN and Canadian Pacific railways. Thesestipulated that the railways enter into service-level agreements witheach of the major marine terminals in Vancouver. These agreementswere designed to improve reliability through co-ordinated mecha-nisms and processes that improve coordination and optimizeproductivity and performance by all involved parties.

“The premise,” says Xotta, “was wanting to put our best foot for-ward with our customers and demonstrate a level of commitmentamong the various service providers in the Gateway.”

Dwell times are monitored daily and data is reported to both rail-ways and other participants in the supply chain. According to Xotta,there has been a consistent improvement in service performanceacross the Gateway, but particularly in the container sector. Conse-quently, while the target average dwell for containers was originallyset at three days, it was revised to 2.5 days as of January 1, 2013.

“It’s evidence that we’re making some progress and that the tar-gets should be adjusted to reflect this,” says Xotta.

He adds that railway operators are among the participants insupply chain leadership meetings held every two months, duringwhich emerging issues are discussed.

On the marine side, an on time incentive program was intro-duced in January 2013 to encourage container vessel operators toarrive in Vancouver within eight hours of their scheduled terminalberth window. By the end of August 2013 on time performance hadimproved by 20 per cent.

“We think it’s translating into more fluid operations and that

An online GPS Dashboard provides aggregated informationgathered from the GPS transponders installed on 1,000trucks and provides road and in-gate wait times for the Port’sfour container terminals as well as terminal turn times.

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14 • Canadian Sailings • September 30, 2013

demand for all the supporting services ismuch more stable and predictable,” saysXotta. “It effectively puts us in the positionof continuing to improve service overall byhelping reduce the peaks in demands forother resources like labour and trucks.”

Smart Fleet Truck Strategy

In 2012, Port Metro Vancouver intro-duced its Smart Fleet Trucking Strategy in

order to assess and ultimately resolve opera-tional challenges that were reducingefficiency and stability of this key asset, andbring about greater efficiency and long-termsustainability in the drayage sector. Thestrategy drew extensively on the input gen-erated through extensive outreach andconsultation sessions that were carried outwith the trucking community, both drivers

and companies, as well as the B.C. TruckingAssociation and their intermodal committee.Initial stages of the three year action pro-gram focused on generating improvedinformation about truck movementsthroughout the Gateway, including at termi-nals, in order to provide more predictablelevels of demand and match that to a supplyof container trucks.

Through the ContainerTruck Efficiency Program, GPSunits have now been installedon 1,000 vehicles, with plansto complete installation on thebalance of the other half of thedrayage fleet by the end of2014. The on-line GPS Dash-board and a Twitter feed havebeen launched to provide oper-ators with real-time in formationthat can help with planningtransits. The Dashboard pro-vides aggregated informationgathered from GPS transpon-ders and provides road andin-gate wait times for Centerm,Deltaport, Fraser Surrey Docksand Vanterm, as well as termi-nal turn times. Visuals areprovided through live webcamfeeds. The Twitter feed pro-vides information aboutreal-time roadway closures andincidents that might affect tran-sit times.

According to Xotta, theContainer Truck Efficiency Pro-gram is in the initial stage ofnormalizing, with consultationcontinuing as elements of thestrategy are refined for furtherimplementation. This willinclude setting time limits atterminals for turning trucks(using GPS data), an initiativein the early stages of implemen-tation and expected to go livein the fourth quarter of 2013.

“It’s just one of the wayswe’re seizing an opportunity todemonstrate that we’refocused on the very samethings as our customers ,” saysXotta, “and that they’vealigned themselves with a portand partner that shares theirvalues, from the perspective ofefficiency and reliability.”

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Cruise volumes reflect consistent service and facilityimprovements

Port Metro Vancouver’s cruise seasonsaw robust growth this year. The Portwelcomed approximately 815,000

cruise ship passengers during its 2013season, a more than 20 per cent jump overlast year’s total. While Vancouver’s proxim-ity to Alaskan ports of call and its transit ofthe Inside Passage are fundamental to itssuccess, the return of several homeportingvessels including the Disney Wonder, Hol-land America’s Amsterdam, the NorwegianSun and Oceania’s Regatta played a key rolein the Port’s exceptional season.

Notwithstanding this success, PortMetro Vancouver continued to seek innova-tive ways to maintain and further boostcruise traffic through efficiency and infra-

structure initiatives in 2012. These builtupon operations and facilities already hailedby industry insiders. At this year’s CruiseShipping Miami, Vancouver was awardedthe Most Efficient Cruise Terminal Opera-tion award by Cruise Insight magazine.

“Cruise lines are surveyed, and theseawards are directly based on theirresponses,” says Carmen Ortega, the Port’sManager of Business Development. “It’sgood to know that our customers appreciateour service and products.”

Among others, the Port has alsoreceived the Best Turnaround Port Opera-tions award and was named the mostpassenger-friendly port in North America byBerlitz over the past few years.

One of this year’s new service initiativeswas the US Direct program, launched in May.The program effectively simplifies customsand immigration processing for US passengersarriving on the same day of embarkation,reducing processing and wait times at boththe airport and the port. According toOrtega, it was a complex program to get offthe ground, requiring extensive collaborationbetween Port Metro Vancouver, VancouverAirport Authority, airlines, cruise lines, theCanada Border Services Agency and the USCustoms and Border Patrol. Initial feedbackhas been good and the overall success of theprogram will be assessed and evaluated fol-lowing the end of the season.

Also new this year, a third shore power

Vancouver is Canada’s the largest cruiseship port, accounting for one-third of thepassenger traffic in Canada during 2012.

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20 • Canadian Sailings • September 30, 2013

connection was installed at Canada Placeterminal to service the unique configurationof the Disney Wonder and Holland Amer-ica’s Amsterdam. The program is a jointeffort between the Port, the federal andprovincial governments and the cruise lines.

“We certainly can’t do these projectssolely on our own,” says Ortega. “Havingstrong relationships with our customers andindustry partners enables collaboration onprojects like US Direct and shore power.”

Shore power is one of the componentsof the Port’s EcoAction Program, whichoffers reduced harbour dues to vessels using

a variety of emissions reduction options,such as the use of scrubbers and other vesseland engine technologies or cleaner fuels.Ortega says that the discounts are based onwhich elements or criteria are being usedvoluntarily by the vessel.

“We want to acknowledge the invest-ment that the lines are making for thebenefit of our local environment and the sus-tainability of our port operations.”

For the 2014 season, Port Metro Van-couver is continuing to pursue ongoingimprovements to its customer service andoperations. The Port is currently assessing

passenger flows through Canada Place andidentifying the source and locations of bot-tlenecks or points of congestion. A reportaddressing these concerns is currently beingprepared and recommendations for improve-ments are expected this winter to preparefor future success.

Vancouver is the largest cruise shipport in Canada and according to a recentreport, B.C. ports collectively accounted for57 per cent of Canadian cruise ship traffic in2012. Direct spending by cruise lines, pas-sengers and crew pumped $790 million intoB.C.’s economy in 2012 alone.

Air emission reductions among key environmentalprograms

Port Metro Vancouver draws on a widerange of tools to mitigate the effects ofport activities on the environment and

local communities within the Gateway.These tools combine long-standing programsand standard processes such as habitat bank-ing and project reviews with newer, morecollaborative initiatives involving the partici-pation of industry and community partners.The commitment of the Port’s staff to theseprograms was recognized this spring as one

of Aon Hewitt’s “Green 30”, the top 30Canadian organizations whose employeesare most positive about their record on envi-ronmental stewardship. Work has continuedthrough the past year, with a significantfocus on air-related programs as well as inthe habitat banking program.

One of the Port’s key initiatives is itsAir Action Program, which provides collabo-rative strategies for reducing emissions ofcriteria contaminants and greenhouse gases

through technology and operational efficien-cies. A pillar of this program is theNorthwest Ports Clean Air Strategy. A col-laborative strategy between the ports ofVancouver, Tacoma and Seattle as well asindustry partners, regulatory bodies andother stakeholders, this program sets emis-sion reduction targets for each port-relatedsector including ocean going vessels, har-bour crafts, cargo handling equipment,trucks, locomotives and port administration.

The strategy is currently being updated,proposing stringent overall emission reduc-tion goals in addition to sector targets. Goalsproposed include a reduction in diesel partic-ulate matter per tonne of cargo by 75 per centand greenhouse gases reduced per tonne ofcargo by 10 per cent by 2015. Additionalgoals are set for 2020. Comments submittedby stakeholders and the public over thesummer are currently under review, follow-ing which the final version of the update willbe completed, likely in early 2014.

The EcoAction Program is another AirAction initiative. A voluntary incentive pro-gram, the program qualifies vessels forreductions in harbour dues depending onwhich emissions-reduction measures theyadopt. These include the use of cleaner fuel,smoke-stack technology and shore power atthe Canada Place cruise terminal, amongother options. Those most successful interms of program participation are eligiblefor Port Metro Vancouver’s annual BlueCircle Award. Nine recipients received theaward for 2012.

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September 30, 2013 • Canadian Sailings • 21

Landside, the Port has also initiated a series of both mandatoryand voluntary standards. Under the mandatory Truck LicensingSystem (TLS), the entire fleet of Port-associated container trucks isbeing moved to the 2007 or newer engine platform, which is thecleanest platform in terms of particulate matter emissions. The Port’scontainer truck fleet is already subject to mandatory annual safetyinspections in addition to any inspections mandated by the provincialgovernment.

Work is also underway on a non-road diesel emission reductioninitiative.

“We’re setting it up now,” says the Port’s Director of Environ-mental Programs, Darrell Desjardin. “We’ve done an inventory of allcargo handling equipment, in consultation with terminal operators,and our target is to launch a related initiative in the coming years.”The program is targeting older equipment with higher rates of emis-sions.

Habitat Banking Program Adding to Ecosystem

The Habitat Banking Program has been very active over the pastyear, continuing a long-term tradition of banking and creating habitatin advance of port development. Several salt marsh restoration proj-ects are currently under way.

“Creating habitats ahead of a development project, allows forthe habitat to properly mature and become functional,” says Des-jardin. “This leads to the success of the habitat.” He adds that severallarger projects will be rolled out in 2014.

As for the future orientation of Port Metro Vancouver’s environ-mental strategy, Desjardin says the focus will evolve out of thefeedback on the 2012 Sustainability Report and the strategies devisedas a part of the Port’s planned Sustainability Vision.

“Our focus will most likely be maintained on the Air Action Pro-gram,” he says, “but there also seems to be more interest from ourstakeholders in biodiversity and local environmental values, as wellas our accountability on better reporting throughout the year. Anyprograms we initiate will reflect those interests.”

A before and after of the Roberts Bank Log Removal and Salt Marsh Restoration, as part of the Deltaport Third Birth Project -one of the Port’s previous Habitat Banking projects.

Our Blue Circle Award recognizesEcoAction Program participants thatachieve the highest emissions reduc-tions for the year. The currentrecipients of the award are:• APL (Canada) • Grieg Star Shipping (Canada) Ltd. • Hapag-Lloyd (Canada) Inc.• Holland America Line • “K” Line • Maersk Line • Princess Cruises • Silversea Cruises• Westwood Shipping Lines

All editorial contents for the Port Metro Vancouver

section were provided by the Port.

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22

The Global View: Adapting to Changing Markets

Ron Buist, Marke ng Guru

Inventor of Tim Horton’s Roll up the Rim contest.

Lunch Keynote Speaker on November 13

Erich Staake, President & CEO, Duisport

Port Innovator and Strategist

Keynote Speaker on November 14

The 9th Annual HWY H2O Conference

November 13 14, 2013

Toronto, Ontario

www.hwyh2o conferences.com

Keynote Speakers Include...

AND

This year the HWYH2O (Great Lakes/Seaway System) conference will take a global viewon adapting to changing markets to stay competitive. Modules will share insight on

economic activities and cargo trends, infrastructure developments that capture businessopportunities and innovation throughout the global maritime industry.

Don’t miss this great opportunity!

Sailings1027p01 to 48 2013-09-25 4:06 PM Page 22

CanadianSailings

Transportation&Trade Logistics

CanadianSailings

Transportation&Trade Logisticswww.canadiansailings.ca

SHIPPERS’HANDBOOK

AccessShippers’ Handbook

on Home Page

23-35

Sailings1027p01 to 48 2013-09-25 4:06 PM Page 23

36 • Canadian Sailings • September 30, 2013

Coal in the spotlight as B.C. officials meet with India’sMinister of SteelBY R. BRUCE STRIEGLER

After decades of having maintained alow profile, coal is suddenly big newsin British Columbia. A steady stream

of stories through the year has detailed pro-posed or actual expansions of coal exportfacilities through Port Metro Vancouver.Until July, the talk was of U.S. coal from thePowder River Basin region of Wyoming andMontana transported by rail to Vancouverfor export to Asia. But in July, unexpectednews broke of a weekend of meetings andluncheons in Vancouver with Indian SteelMinister Beni Prasad Verma along withother senior Indian government and indus-try officials conferring with Premier ChristyClark, B.C. International Trade MinisterTeresa Wat, staff from the British ColumbiaMinistry of Energy and Mines and provincialcoal industry representatives.

The newly created B.C. Ministry ofInternational Trade responded to questionsfrom Canadian Sailings, saying, “Our newministry is guided by the central premisethat B.C. must secure its place in marketsthat are and will continue to be drivers ofglobal economic growth.” The B.C. JobsPlan shows British Columbia’s current prior-ity markets are China, India, Japan, Korea,the United States and the European Union.The Ministry notes, “Our activities in thosemarkets are strategically aligned with ourkey sectors: forestry, mining, natural gas,agrifoods, transportation, technology, inter-national education and tourism.”

David Ewing, Vice-President Environ-ment and Technical Affairs of the MiningAssociation of British Columbia says, “Themeetings and other events were an opportu-nity to better understand the objectives ofthe Indian Government and some of the cor-porate heads of India’s steel companies aboutcoal imports from Canada. It was an oppor-tunity to meet and better understand wherewe could create alliances.” He points outthat B.C. is in a position of strength when itcomes to international competition fromcountries such as Australia, saying, “We havestable government, transportation infrastruc-ture, proximity to the Asian markets and wehave a good product,” adding that B.C.needs to maintain cost-effective power ratesto the mines in order to maintain competi-tive access to Asian markets.

In 2012, British Columbia coal exportsto India were worth $161 million, up from$72 million in 2011 and represented 99.98per cent of Canada’s coal shipments to thatmarket in 2012. B.C.’s Ministry of Interna-tional Trade notes that last year, Australia

and Indonesia supplied the majority ofIndia’s coal worth over $6 billion, represent-ing 39.9 per cent of India’s imports.Indonesia shipped $5.5 billion worth of coalto India in 2012, or 36.2 per cent of itsimports. “That said, it is very important tonote that most of the coal mined in B.C. isused to manufacture steel, rather than ther-mal coal that is burned to generateelectricity, which is the bulk of Australianand Indonesian exports,” says the Ministry.

According to the Coal Association ofCanada, B.C. is rich in coal, having 12.9 bil-lion tonnes of mineable resources. Eightbillion tonnes of that are located in the south-east of the province, another 4.9 billiontonnes in the Peace River coalfield in north-eastern B.C. The province has ten operatingcoal mines, nine of which produce metallur-gical coal and one on Vancouver Island thatproduces thermal coal. There are additionalsites around the province under explorationor in stages of advanced development. Bothgovernment and mining officials are quick topoint out that over 95 per cent of the coalmined in B.C. is metallurgical coal which,when burned, produces lower volumes ofgreenhouse gases than thermal coal.

India, the world’s fourth largest steelproducer is adding between five to six mil-lion tonnes of additional steel-makingcapacity, but while the country has domesticcoal reserves of 286 billion tonnes, fifth-largest in the world, they consist of mostlythermal coal used for electricity generation.Mr. Ewing from the Mining Associationsays, “The conversations I had with dele-gates were around the ways in which wemight get more metallurgical coal to Indiaand what possibilities existed around part-nering with, or acquiring, coal mines to

support their increasing steel production.”India’s hunger for the commodity is

being discussed by analysts who are predict-ing that imports of both coking and thermalcoal are headed for significant growth.Reuters reported this spring that demand formetallurgical coal imports will grow by 8.7per cent to 35 millions tonnes in the 2013-14 period alone. Thermal coal imports areon track to hit approximately 145 milliontonnes this fiscal year. These increases willabsorb all the excess production from thePacific region and provide unexpectedmomentum for global coal producers, partic-ularly those producing metallurgical coal.

In the face of considerable environ-mental opposition to coal mining andexport, Mr. Ewing says, “The companies Iwork with in my role see the environmentalside of their operations as having key impor-tance now and in the future. They recognizethat social licence is very important to them,as is reputation, so they are motivated tomaintain standards well within or thatexceed, those set by government.” He adds,“Many of the people who are making thesedecisions live in the communities where themines are active, so it’s also in their personalinterest as well as their company’s, to ensuretheir environmental standards remain high.”

B.C. and the global mineral supplychain

In Australia, the industry is retrenchingas coal prices have plummeted, causing lay-offs in the past year of more than 11,000workers, a fifth of its workforce. These stepsare part of a desperate attempt by companiesto cut costs as the spot price of thermal coalused for power generation has fallen byabout 30 per cent over the past several years

Westshore Terminals at Port Metro Vancouveris Canada’s biggest coal terminal.

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September 30, 2013 • Canadian Sailings • 37

to under $80 a tonne, while contract prices for coking coal havedropped 50 per cent to $145 a tonne. In a recent report, DeutscheBank estimated that the costs at BHP Billiton’s and Rio Tinto’s Aus-tralian coal operations had increased 320 per cent since 2005. Lastmonth, Peabody Energy, the world’s largest private coal companyrevealed that the gross margin per tonne from its 11 Australian minesacross New South Wales and Queensland had fallen from $36.25 ayear earlier to $13.05 in the three months to June. At the 9th AnnualCoaltrans Australia conference held in mid-August, a number ofspeakers reported that miners were targeting 20 per cent reductionsin cost per tonne by cutting jobs, limiting wage hikes, trimming con-tractors and delaying or abandoning new projects, and in fact, someUS$ 29 billion worth of new projects have been already deferred.

In an ironic twist that clearly demonstrates today’s global mineralsupply chain, and may well influence Indian import decisions, amend-ments are underway to South Africa’s Mineral and Petroleum ResourcesDevelopment Act. India has been increasing its imports of South Africancoal, and the country is well-positioned to meet those increases. How-ever, one of the potential new clauses of the amendments includes adeclaration of strategic minerals in an attempt to control supply and pric-ing of national commodities, with coal already identified as a strategicresource. Analysts don’t believe India would continue its South Africanimports if the strategic declaration clause were included. In the mean-time, the government is taking comments on the proposedamendments, the final version expected in early September.

India potential an opportunity to grow B.C. coalproduction and jobs

With Indian government forecasts that by 2017 the country willneed twice as much metallurgical coal, the conditions are ripe forB.C. coal producers. The additional 47 million tonnes of metallurgicalcoal India forecasts it’ll need every year is more than B.C.’s entire cur-rent annual production of 24 million tonnes. Teck Resources is thelargest metallurgical producer with its operations in southeastern B.C.Vancouver-based Teck received approval from the B.C. governmentearlier this year to restart the closed Quintette mine at Tumbler Ridgein northeast B.C. and a spokesperson is quoted saying, “We havedelayed the final stage of development and will not commence pro-duction until the steel-making coal market recovers. If a decision ismade in early 2014 to proceed with the reopening, the operationcould be in commercial production by mid-2015.”

The Quintette mine operated from 1982 to 2000 and closed dueto low coal prices, putting nearly 600 people out of work. Teck’sother operation in the area, the Bullmoose mine, closed in 2003,caused the layoff of a further 300 workers. In addition to Teck, thereare several other metallurgical coal mines in northeastern B.C. whichinclude operations owned by Walter Energy and Anglo American. Ahandful of others have projects in development in the northeastsector including Xstrata, Cardero Resources and Colonial Coal.

Vancouver-based, Chinese-owned HD Mining International Ltd.is reviewing plans for a $300-million coal operation 13 kilometressoutheast of Tumbler Ridge. HD forecasts that its Murray River proj-ect could produce up to six million tonnes a year and create 600 jobs.In May, the Federal Court of Canada dismissed a challenge by twounions over HD’s hiring of 201 temporary workers from China tobegin a preliminary phase, including extracting bulk samples of coal.

In mid-August, Anglo American PLC opened the Roman Mine,expanding its coal operations in the Tumbler Ridge region, afterinvestments of $200 million. The London-based miner expects theexpansion will ensure the jobs of more than 420 workers by extend-ing coal production for up to 16 years as Anglo American’s TrendOperation will be depleted in the next four years. The mine is cur-rently producing about 1.5 million tonnes which will increase to 2.5million tonnes as the Roman operation comes on-stream.

So certain of its decision, Anglo American has acquired the 102-room Trend Mountain Hotel in Tumbler Ridge, reserving more than50 rooms for mining staff. The company announced it was setting

aside 1,852 hectares of its tenures to protect caribou habitat and willcontribute $2.56 million towards the Government of British Colum-bia’s Peace Northern Caribou Plan. In further environmentalremediation efforts, the company plans on building the first seleniumwater treatment facility in the northeast.

The high quality of the coking coal and the relative ease of trans-porting the commodity on an underutilized rail line to the RidleyIsland terminal at Prince Rupert are expected to boost Anglo Ameri-can’s Asian steelmakers’ market strategy. The low sulphur content ofB.C. coal and an expansion project to more than double the capacityof Port of Prince Rupert’s Ridley coal terminal by the end of 2014 willgive northeastern British Columbia coal a competitive export edge.

Working to broaden the trade relationship with India

In statements to Canadian Sailings, B.C.’s Ministry of Interna-tional Trade said, “We have recently expanded our trade andinvestment team on the ground in India. B.C. has opened new officesin Mumbai and Chandigarh, tripling the number of trade and invest-ment experts we have in India. One of the results has been thatIndian companies such as Rashtriya Ispat Nigam Limited (RINL), anIndian state-owned steelmaker, have increased their interest in B.C.coal in the past year.”

The trade delegation that visited Vancouver was the result ofcooperative efforts by B.C and Federal Trade and Development coun-terparts, and during the Vancouver visit a letter of intent was signed,an initial commitment to connect RINL with suitable partners in B.C.“Our trade and investment teams in Vancouver and India will continueworking with RINL over the coming months to make those connec-tions. We have a mandate to accelerate B.C.’s export opportunities, andour Ministry will continue to work toward engaging and enablingBritish Columbia’s businesses to succeed abroad,” Minister for Interna-tional Trade Teresa Wat said. “Part of my mandate this term is to attractmajor firms to invest in and set up head offices in B.C., and to ensurethe province plays an active role in trade agreement negotiations.”

In recent years, the Government of British Columbia has imple-mented an aggressive strategy to assist B.C. companies expand theirbusiness internationally. The new Ministry of International Trade oper-ates the Asia-Pacific Trade Centre in Vancouver employs key tradesector specialists and has expanded its network of international tradeand investment representatives at offices throughout Asia, Europe andthe United States. In addition, the government has implemented anumber of other resources including the B.C. Business Network, adirectory of leading B.C. suppliers and exporters, which uses globalbusiness accelerators in China, India and California who offer local-ized expertise, strategic advice, international business contacts.

The Ministry says, “By focusing our resources on opening andexpanding markets for B.C. goods and services, our government playsan important role in increasing international trade and encouragingthe economic diversification that will drive new job creation acrossBritish Columbia.”

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38 • Canadian Sailings • September 30, 2013

Irving Shipbuilding invests $300 million in HalifaxShipyard Modernization Program

Irving Shipbuilding announced severalcontract awards as part of part of the Hal-ifax Shipyard Modernization Program, a

two-year engineering and constructioninvestment to prepare the company’s facili-ties to build Canada's future combatantships. Site preparation and preliminary con-struction is well underway, with majordemolition and construction to begin soon.

“Irving Shipbuilding will invest approx-imately $300 million in the Halifax ShipyardModernization Program, which is designedto ensure our facilities are ready to undertakeproduction of the AOPS vessels scheduled tostart in 2015, as well as the larger combatantship contract currently scheduled to beginproduction between 2020 and 2022.” saidJim Irving, Co-CEO, J.D. Irving, Limited.“The selection of suppliers for our Modern-ization Program is the result of a rigorousprocurement process where we assess qual-ity, reliability, experience and cost to selectthe company that will help us deliver thebest value to Canada.”

To date, Irving Shipbuilding has awarded$127.7 million in contracts associated withthe Halifax Shipyard Modernization Program,creating approximately 733 full-time-equiva-lent (FTE) positions directly within its selectedsuppliers and indirectly within those suppliers’subcontractors and approximately $58 million

in annual employment income over the two-year program period across. Of the contractslet to date, 53 per cent of the total contractvalue has been awarded to companies ownedor operating in Nova Scotia, generatingapproximately 370 full-time-equivalent (FTE)positions directly within the company’sselected Nova Scotia suppliers and indirectlywithin those suppliers’ subcontractors, as wellas $26 million worth of employment income

within the province over the two-year period. Upon completion, the modernization

project will result in one of the most modernshipyards in North America. The yarddesigns have been reviewed and bench-marked against international best practicesby independent third party First MarineInternational, to ensure the updated facilitiesmeet the target state measures established inthe NSPS procurement process.

Canadian rail operators to continueto reduce locomotive emissions

Lisa Raitt, Minister of Transport and Michael Bourque, President and CEO of the RailwayAssociation of Canada (RAC), announced a renewal of the voluntary agreement that willhelp reduce air pollutants and the intensity of greenhouse gas emissions from locomo-

tives that operate in Canada. "This agreement will help to limit emissions from rail sources and is another fine example of

partnership and collaboration between our government and the rail industry" said Minister Raitt.In 2010, the rail sector transported about 71 per cent of total Canadian surface freight

and accounted for approximately four per cent of total Canadian transportation greenhouse gasemissions. Similarly, intercity passenger and commuter railways moved approximately 73 mil-lion people across Canada and within our major urban centres.

"Canada's railway sector is reducing emissions while moving more people and goods thanever before," said Mr. Bourque. "Our Memorandum of Understanding with the Minister ofTransport is a proven tool for continuously improving our performance. I want to thank Min-ister Raitt for her commitment to reducing emissions and for this collaborative approach toenvironmental improvement."

The renewed Memorandum of Understanding encourages all RAC members, includingfreight, intercity passenger, shortline and commuter railway companies in Canada to continueto voluntarily reduce locomotive emissions. The agreement includes measures, targets andactions that will further reduce the intensity of greenhouse gas emissions from rail operationsand includes a commitment to continue to monitor criteria air contaminants. The agreementwill also benefit the rail industry through fuel cost savings that will contribute to the compet-itiveness of Canada's rail companies.

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September 30, 2013 • Canadian Sailings • 39

Irving Shipbuilding’s NSPS Facility ModernizationProgram

Over next two years Irving Shipbuilding will invest an esti-mated $300 million to modernize Halifax Shipyard toprepare for the Canadian Surface Combatant (CSC) program

of the National Shipbuilding Procurement Strategy (NSPS). Upgradeswill be complete in time to accommodate the scheduled 2015 cut-steel date for the first set of NSPS vessels, the Arctic Offshore PatrolShips (AOPS).

The new Halifax Shipyard site comprises (seeillustration on previous page):

• A new Assembly Hall with: A Steel Assembly area containing a 12-metre-wide panel line and sub-assemblies area 11 Unit Assembly /pre-outfit/ 3-D unit workstations Low assembly area: 22 metres; High assembly area: 27 metres

• A dedicated paint area used for painting of outfitted Units • An Ultra Hall (47-metre-high) used for Block and Mega Block

assembly • Assembly, Paint and Ultra hall building length: 408 metres • A land level Construction Point at which final ship erection would

occur prior to launch • A launch barge area in which a barge would be positioned to

receive the complete ship • A serviced outfitting pier (165 metres in length) located alongside

the ship-erection platform

Parking Garage:

A new parking garage for Irving Shipbuilding employees,accommodating 520 cars is expected to be complete by January2014. Currently, the company is encouraging employees, suppliersand partners to use carpooling, public transit and other transportationmodes.

Following completion of the parking garage, Irving expects tocontinue encouraging multi-transit practices.

Offsite Steel Fabrication Facility:

Due to a lack of sufficient space within the footprint of the exist-ing yard, Irving will be establishing an Offsite Steel FabricationFacility on Windmill Road in Dartmouth. The facility will be ownedand operated by Irving Shipbuilding.

In addition, these services will be marketed to other industriessuch as Offshore Oil & Gas and Oceans Technology

Construction Timelines:

Building demolition is expected to be complete in the first quar-ter of 2014. The offsite Fabrication Facility will be complete firstquarter 2015. Steel cutting for the first AOPS is scheduled to takeplace in the Offsite Fabrication Facility in second or third quarter of2015.

All modernization work at Halifax Shipyard is scheduled to becomplete in the third or fourth quarter of 2015.

Tracey Raimondo recipient of 2013 CITT Award of Excellence

Warren Sarafinchan, Chair of theBoard of Directors of CITT, ispleased to announce that Tracey

Raimondo, CITT, has earned the 2013 CITTAward of Excellence.

“It’s a great honour for me to bechosen for the 2013 Award of Excellenceand to join the distinguished list of great pro-fessionals who have earned this awardbefore me,” said Mrs. Raimondo. “And to berecognized by my peers within CITT makesit especially rewarding.”

Mrs. Raimondo is the Vice President,Logistics, at Normandin Transit Inc., a Cana-dian asset-based carrier headquartered inNapierville, Quebec. Prior to that, she wasco-owner of AA Options Transport Consult-ants with her brother Eric. Mrs. Raimondois a third generation logistic pro. Both hergrandfather and father Peter also worked intransportation.

Mrs. Raimondo served on CITT’sBoard of Directors in various capacities,including Chair, from 2003 to 2007. Shehas also been involved with the CITT’s

Montreal Area Council for 17 years. Mrs.Raimondo represented CITT on the board ofthe Canadian Supply Chain Sector Council,and is currently serving on the board of laCommission Développement Économique,as Commissaire Votante, representing theTransport et Logistique Sector for la Vallée-du-Haut-Saint-Laurent.

CITT Chair of the Board WarrenSarafinchan has known Tracey for manyyears and commented that “Tracey Rai-mondo’s leadership and vision has been adriving force for CITT and the logisticsindustry both nationally and especially inQuebec. In a year where we had manystrong nominations, CITT is proud to recog-nize Tracey with this prestigious award”,said Mr. Sarafinchan.

Mrs. Raimondo holds a Certificate inLogistics from Université du Québec à Mon-tréal (UQAM), her designation from CITT aswell as her CIFFA certification. She sharesher knowledge and experience as a mentorin the CITT Mentorship program. She willbe presented with the 2013 Award of Excel-

Tracey Raimondo

lence at the Gala Awards Dinner to be heldduring the National Conference on SupplyChain and Logistics presented by CITT onTuesday, November 5 at the SheratonCentre Toronto Hotel.

Sailings1027p01 to 48 2013-09-25 4:06 PM Page 39

40 • Canadian Sailings • September 30, 2013

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Richardson invests $40 million to enhance westernCanadian network

Richardson International Limited is investing $40 million to fur-ther enhance its Richardson Pioneer network of grain handlingand crop input centres across western Canada. This investment

includes increased grain storage, high-speed fertilizer blenders, a fer-tilizer distribution centre and the creation of four new crop inputlocations.

This is the latest in a series of significant investments Richardsonhas made to expand its operations across the country. On May 1, thecompany acquired 19 grain elevators, 13 crop input centres, anexport terminal in Thunder Bay and Viterra’s oat and wheat millingbusiness. In April, Richardson announced it is investing $120 millionto expand its grain terminal in Vancouver. Richardson is currentlyincreasing capacity at its canola processing facility in Yorkton by 25per cent and also recently announced plans to expand its canola pro-cessing facility in Lethbridge.

“We are always looking for opportunities to expand and diver-sify our business,” says Curt Vossen, President and CEO ofRichardson International. “We are proud to be celebrating a centuryof growth with the 100th anniversary of Richardson Pioneer in 2013and we will continue to grow into the future to meet the needs of ourcustomers at home and around the world.”

In 2013, Richardson plans to add 14,000 MT of storage capacityto each of its elevators in Carseland, AB, Crooked River, SK and ShoalLake, MB, increasing capacity at these facilities between 54 and 68per cent. Since 2007, Richardson has been focused on increasing stor-

age capacity at its Richardson Pioneer grain facilities and 18 havebeen completed since that time.

Richardson is also further investing in its crop inputs business. Fourformer Viterra grain elevators - South Lakes (Stony Mountain) and RedRiver South (Letellier), MB, Kindersley, SK and Lacombe, AB - will eachreceive high speed blenders, fertilizer storage and a 6,000- square-footchemical and seed warehouse to become full-service crop input centres.

Richardson is building a 35,000-tonne fertilizer distributioncentre at Carlton Crossing (Saskatoon), SK. The company is alsoadding six high-speed fertilizer blenders at its Richardson Pioneerlocations in Oyen and Magrath, AB, Kamsack, Saskatoon and Shell-brook, SK and Shoal Lake, MB.

“We continue to make investments to better serve our currentand future customers. We look to provide efficiencies by having fullyintegrated grain handling and crop inputs businesses and being a mul-tiple-service provider,” says Darwin Sobkow, Executive Vice-President,Agribusiness Operations. “Richardson is proudly Canadian and we areworking to be the business partner of choice for Prairie farmers.”

Richardson International is Canada’s largest agribusiness andrecognized as a global leader in agriculture and food processing.Based in Winnipeg, Richardson is a worldwide handler and merchan-diser of all major Canadian-grown grains and oilseeds and avertically-integrated processor and manufacturer of oats and canola-based products. One of Canada’s Best Managed Companies,Richardson has over 2,300 employees across Canada and the U.S.

Sailings1027p01 to 48 2013-09-25 4:06 PM Page 40

September 30, 2013 • Canadian Sailings • 41

Ocean carriers continue to become asset lighter

The way that vessels and containers arebeing ordered indicates that oceancarriers are set to become significantly

asset lighter during the next couple of years.According to Drewry’s Container InsightWeekly, just over 64 per cent of all vesselcapacity ordered since the middle of 2011has been placed by tramp vessel operators,and the proportion since the middle of 2012is an even higher 65 per cent.

This builds on a trend started as wayback as 2004, when the proportion of thetop 20 carriers’ fleet that was chartered inreached just 48 per cent, and climbed to 53per cent in 2011, although the more recentposition of the top 10 in isolation shows adifferent picture, with ownership actuallyincreasing between 3Q 11 and 1H 13

If the world’s largest tramp vessel oper-ator, Reederei C P Offen, were to be includedin the industry ranking of top 20 carriers, itwould already appear in third position, basedon data from Drewry’s Annual ContainerMarket review and Forecast.

Most of the other top 20 carriers havebeen resorting to long-term leasing, as well

Ocean carriers are increasingly resorting to leasing/chartering to acquire vesselsand container equipment, creating opportunities for new financiers to enter themarket.

as short-term charters. For example, CIMC’srecent order for seven 8,800-TEU vessels isunderstood to be backed by a charter agree-ment with MSC lasting as long as 17 years,although 5-10 years is more the leasingperiod norm.

Assuming that not all carriers renew

their lease agreements on expiry, this meansthat there will be a growing pool of largecontainer vessels for hire, opening up oppor-tunities for new market entrants should theright circumstances arise.

How long the ocean carrier trend ofincreased leasing/chartering will continue is

Proportion of global Top 20 Carriers’ fleet capacity that is chartered

Source: Drewy Maritime Research

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42 • Canadian Sailings • September 30, 2013

unclear, as it is partly driven by financialnecessity. Cash flow remains tight, and leas-ing just spreads the burden of assetacquisition over a longer period of time.Ownership requires immediate hefty ship-yard deposits, and repayment of ship loanstypically within eight years. Leasing alsomakes a company’s balance sheet ratios lookbetter, although this could change due to aproposed alteration of accounting standardsin 2017.

For example, according to a brokercontact, the MSC deal just referred to mustbe a strictly financial arrangement as, withnewbuild prices for such 8,800-TEU vesselscurrently being in the region of $85 million,a T/C rate around $30,000/day would nor-mally be required to break even, which issignificantly higher than the $25,000/dayreported.

The same trend applies to containerequipment ownership, where leasing hasalso been growing in importance. Accordingto Drewry’s latest Container Lease IndustryReview 2013, lessors purchased 58 per centof all newbuild containers last year, as wellas acquiring substantial older equipmentfrom ocean carriers through sale and lease

back. As shown in the figure below, thisenabled them to grow their market sharefrom 42.8 per cent in 2011 to 45 per cent in2012.

Drewry’s view

As ocean carriers’ financial results arenot expected to improve significantly before

2016, leasing will continue to grow, therebycreating opportunities for new financiers toenter the market. Although still some wayaway, the pool of large containerships avail-able for charter will grow, with a widevariety of possible consequences Reprinted with permission from Drewry Maritime Consultants.

Claude Mongeau: CN’s business agenda supportsgrowth of Halifax gateway

Claude Mongeau, President and CEO of CN, speaking at Portof Halifax Port Days 2013 said CN’s supply chain collabora-tion agenda and commitment to Operational and Service

Excellence can support growth at the Port of Halifax and make therailway’s and port’s common customers more competitive in theirend markets.

Mongeau said CN’s collaboration agreements with Halifax PortAuthority and its two container terminal operators, Halterm Con-tainer Terminal Ltd. and Cerescorp Company Ltd., are “creatingfaster and more reliable supply chains, demonstrating the benefits ofteamwork and generating positive responses from international ship-ping lines and their customers.” The agreements, dating back to2010, were the first signed by CN, which has similar ones with all ofCanada’s major ports and their terminal operators. The agreementscontain clear standards and performance measurement mechanismsfor the railway and its partners.

Mongeau said the Port of Halifax/CN partnership faces signifi-cant competitive pressures from other ports and vessel routingoptions, including New York, which enjoys a large hinterland marketand highly competitive sea and land distances between Asia andinland points. “We have to work hard to compete, but we also havea strong suit: a solid eco-system of collaboration, an end-to-end viewof the supply chains we serve, and access to markets with the poten-tial to grow.”

Mongeau said temperature-sensitive cargo is one such growthopportunity. “The port of Halifax is well equipped to handle CoolCargo, with over 1,000 reefer plugs now, compared to 500 just a fewyears ago. This has been a major effort at the Port to put Halifax inthe big leagues for reefer traffic. CN has also invested significantly in

new generator sets on containers, with GPS and remote-monitoringcapability.” Mongeau concluded: “With a strong partnershipanchored on innovation and a commitment to continuous improve-ment and increased productivity, CN and Halifax can have a brightfuture together.”

Proportion of containers in use globally owned by leasing companies

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September 30, 2013 • Canadian Sailings • 43

Drewry’s Top Ten Global Terminal Operators

Drewry’s Annual Review of Global Container Terminal Opera-tors, released in August, shows that PSA International,Hutchison Ports, APM Terminals and DP World remain the

big four players in equity teu and portfolio terms but with varying

levels of activity– DP World and APM Terminals are highly active interms of acquisitions, divestments and greenfield developments,Hutchison moderately active and PSA less so. ICTSI and TIL are alsoparticularly active in terms of portfolio expansion.

There is a clear focus on growth opportunities in emerging marketsby those global/international terminal operators which are expanding.Major shipping lines meanwhile have been selling stakes in terminals toraise cash – but usually retaining majority control. The deals involvingCMA CGM’s Terminal Link and MSC/TIL have been the most signifi-cant. Most carriers have seen little change in their terminal portfolios asa result, adopting a holding rather than expansion policy. Several playersnot currently categorised by Drewry as global/international terminaloperators are growing fast and have a strong appetite for internationalexpansion, including China Merchants, Gulftainer, Bolloré and Yildirim.

Others such as GPI, SAAM Ports, Ultramar and Ports America and arealso making selected expansions or seeking to acquire. Certain keyfinancial and infrastructure investors are also active, notably GIP andMitsui. The report’s editor, Neil Davidson says: “Within the global/inter-national terminal operator club there are widely varying strategies andlevels of activity. Some operators are very active with their portfolioswhilst others are seeing little change. More M&A activity is highly likely,especially in carrier owned portfolios. Plus, waiting in the wings, thereare a number of aggressive new players, some of which will soon qualifyas global/international operators.”

Source: Drewy Maritime Research

TO PLACE YOUR ADVERTISEMENTS IN

Canadian Sailings

“CAREER CENTRE”

Please call Wendy Hennick

at 514-556-3042

Career ads appear on our website

canadiansailings.ca

CAREER CENTRE

CGM CGM Canada Inc. is looking for an Export CustomerService Representative for its Montreal office.

This position requires that candidates have at least one yearof shipping experience in a similar function.

The ideal candidate must be proficient in Microsoft Windows-based programs. Must be bilingual (English and French).

We offer competitive compensation and an excellent bene-fit package. Please send your resume by fax or email to:Fax: 514-908-7009

Email: [email protected]

EXPORT CUSTOMER SERVICE REPRESENTATIVE

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44 • Canadian Sailings • September 30, 2013

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September 30, 2013 • Canadian Sailings • 45

Market imbalance upsets OOCL stability as box carriersails into the red BY GAVIN VAN MARLE

In a sign of just how weak the container shipping market hasbecome this year, the parent company of Hong Kong-based boxcarrier OOCL announced that it had suffered a $15 million net

loss in the first half. Despite being one of the few lines in 2012 toremain in the black, the realities of the market have subsequentlycaught up with OOCL, with revenues from shipping for the first sixmonths of 2013 dropping by 3.7 per cent to $2.8 billion, on the backof a 1.5 per cent decline in volumes and a 2.2 per cent decrease inaverage freight rates.

The company has consistently been hailed as one of the mostwell-run in the business, with tight control on costs and a measuredapproach to growth that has seen it limit itself to four core markets:the three east-west Asia-Europe trades; transatlantic and transpacific(which it operates as part of the G6 Alliance); and intra-Asia. How-ever, it has experienced declining volumes on every lane, with thetranspacific and Asia-Europe the hardest hit – volumes down 8.3 percent and 7 per cent respectively – at a time when capacity across theindustry has increased with a menacing relentlessness. The debilitat-ing rate war of recent months has also been evident, with revenue onOOCL’s Asia-Europe service declining 25 per cent year-on-year in thesecond quarter alone.

While OOCL Chairman C.C. Tung noted that there were signsof optimism over the general economic situation, he also warnedinvestors not assume that that would translate into rapid improve-

CMA CGM reports Q2 results

CMA CGM, the world’s third largestcontainer shipping group, announcedresults for the second quarter 2013.

Consolidated revenues amounted to $4.0billion, up 5.6 per cent over the first quarterand down 2.4 per cent compared with Q2 of2012. The year-over-year decline reflected anaverage drop in freight rates of 8.6 per cent,partially offset by a 6.9 per cent increase involumes carried, to 2.9 million TEUs.

CMA CGM reported consolidated earn-ings before interest and taxes of $418million, up 7 per cent year-over-year. How-ever, excluding non-recurring items, coreEBIT stood at $172 million. In addition,CMA CGM reported a consolidated net profitof $268 million (of which $249 millionrelated to the reorganisation of the port oper-ations, including the disposal of its 49 percent stake in Terminal Link to China Mer-chants Holdings International), versus a profitof $169 million in second-quarter 2012.

CMA CGM continued to strengthen itsbalance sheet by reducing its net debt to$3.8 billion at June 30, a decrease of $385million since March 31, and increasing itsequity by $363 million during the quarter,to $4.8 billion, in part through the place-ment of $150 million of mandatoryconvertible bonds.

FINANCIAL HIGHLIGHTS

*Excluding non- recurring items, including the sale of a 49 per cent stake in Terminal Link

and reorganization of the port operations, other asset disposals.

Outlook for 2013

In the third quarter, CMA CGMexpects it will deliver improved operatingperformance as a result of on-going cost

discipline and higher freight rates. Themanagement expects to report a profit for2013 commensurate with the company’s2012 performance.

ments in profitability. He said: “We need to be mindful that the slow-down of the Chinese economy, ongoing economic restructuring inEurope and the uncertainties around the sustainability and strengthof the recoveries in the US and Japan continues to post challenges forthe global economy.

“Against this backdrop, the industry still faces a 21 per centgrowth in capacity between today and 2015. We therefore expectmargins to remain thin and volatile, and that the situation will notimprove substantially until fundamental supply and demand reachesa better balance.”

Kindly reprinted courtesy of The Loadstar (www.theloadstar.co.uk).

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46 • Canadian Sailings • September 30, 2013

Correction:On page 17 of the September 2 issue of Canadian Sailings, in an article entitled “Maersk continues to

innovate”, it was erroneously stated that the Maersk McKinney Moller was capable of carrying 8,000

tonnes of cargo. In fact, Maersk noted that all triple-E vessels have a capacity of 160,000 deadweight

tonnes, without referring to a specific cargo capacity. Canadian Sailings regrets the error.

FedEx reports first quarter results

FedEx Corp. reported earnings of $1.53per diluted share for the first quarterended August 31, compared to $1.45

per share last year. Revenues of $11.0 billionwere up 2 per cent from $10.8 billion theprevious year. Operating margins of 7.2 percent were up from 6.9 per cent the previousyear, and net income of $489 million was up7 per cent from last year’s $459 million.

Frederick W. Smith, FedEx Corp.Chairman, President and CEO commented“Growth in overall demand for our broadglobal portfolio of solutions drove our

improved first quarter results.” FedExExpress remains focused on reducing costswhile facing challenging global economicconditions. Meanwhile, FedEx Ground con-tinues to generate strong profitability ongrowing customer demand for its services.

FedEx Express announced it willincrease shipping rates by an average of 3.9per cent for U.S. domestic, U.S. export andU.S. import services effective January 6,2014. The FedEx Ground and FedEx Smart-Post pricing changes for 2014 will beannounced later this year. FedEx Freight

implemented a 4.5 per cent general rateincrease on July 1, 2013.

Outlook

FedEx reaffirmed its forecast of full-year earnings per share growth of 7 per centto 13 per cent from last year’s adjustedresults. This outlook assumes the marketoutlook for fuel prices, U.S. GDP growth of2.1 per cent and world GDP growth of 2.6per cent. The capital spending forecast forfiscal 2014 remains $4 billion.

Seaport industry to gather in Florida for AAPA’s 102nd Annual Convention

For the first time in its 60-year history, the Canaveral PortAuthority will serve as host of the American Association ofPort Authorities’ (AAPA) annual convention, which takes

place October 13-17. And, for the first time in AAPA’s 102-year his-tory, the business meetings for its international conference will besplit between two locations in Florida: Port Canaveral, one of theworld’s busiest cruise ports with growing cargo; and Orlando, oneof the busiest American cities for conferences and conventions. Theseaport facilities at Port Canaveral are Orlando’s “gateway to theworld” for both cruise passenger visits (more than 4 million per yearand growing) and for important cargoes ranging from petroleum,salt and other bulk commodities, to refrigerated freight like juiceconcentrates and other perishables, to building materials, boats andheavy equipment. As part of the convention’s informative businessprogram, a host of presenters from both the private and public sec-tors will discuss topics ranging from global and economic traderecovery to perspectives on the future of public port authorities.

Keynoting the program will be U.S. Department of Transporta-tion Deputy Secretary John Porcari, as well as Canadian Ambassadorto the United States Gary Doer and Disney Cruise Line PresidentKarl Holz. Also lined-up for the program’s Wednesday luncheon is aspecial guest speaker who will be announced just as the conventionis getting under way. “We’re delighted to have the Canaveral PortAuthority host our 102nd AAPA Annual Convention and Expo,” saidKurt Nagle, AAPA’s President and CEO. “As Florida’s second-busiestcruise passenger port and the cargo gateway for world-renownedlocations such as Orlando and the Space Coast, Port Canaveral hasits eye on the future as it expands and diversifies its business modelfor affordable, efficient transportation for both people and cargo.”

Mr. Nagle noted that, in addition to the topics and keynote speakersmentioned above, convention attendees also will hear from interna-tional environmental leaders who will discuss two environmentalcertification programs endorsed by AAPA for its member ports; acrisis communications specialist who will lead an interactive sessionon effective strategic communications planning; and the winners ofAAPA’s awards competitions for communications, environmentalimprovement, information technology and facilities engineering,who will discuss their 2013 award-winning projects.

Port Canaveral will host AAPA’s convention and exhibitionactivities at the JW Marriott Grande Lakes Hotel in Orlando. Inaddition to programs in Orlando and Port Canaveral, the agendaincludes a reception at the Kennedy Space Center, hosted by Port ofHouston Authority, next year’s AAPA Annual Convention host. “AsOrlando’s port, we’re thrilled to host AAPA’s 102nd Annual Con-vention and Expo in central Florida this year,” said John E. Walsh,Port Canaveral’s CEO. “We boast a maritime history, rich in tradi-tion and innovation, providing our region with thriving cruise andcargo operations as well as more recreational access than all ofFlorida’s other ports combined. We look forward to showcasing PortCanaveral and our region’s unique blend of business and leisureopportunities.”

The convention will conclude with a members-only annualmeeting and election of new officers and Directors for the Associa-tion’s upcoming activity year, including the installation of TayYoshitani, CEO of Port of Seattle, as AAPA’s 2013-2014 Chairmanof the Board. Additional information about the event, including itsbusiness program’s agenda, exhibitors and sponsors, is available ataapa.getregistered.net.

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Contact WENDY HENNICK [email protected] • 514-556-3042 Ext. 2

Canadian Sailings is not responsible for errors. Please verify with event organizers for possible changes or cancellations.

October 2

NORTHERN ONTARIO BUSINESS

Northern Ontario Business Awards

Nipissing University - Robert J. Surtees Student Athletics

Centre, North Bay, Ontario

contact: 705- 673-5705 ext. 320, Kimberly Wahamaa

[email protected]

www.noba.ca

October 2-3

INFORMA MARITIME EVENTS

Arctic Shipping Forum North America

Sheraton Hotel Newfoundland, St. John’s, Newfoundland

contact: 44 20 7017 4402, Paul Skinner

[email protected]

www.informamaritimeevents.com

October 2-4

ASSOCIATION OF SHIP BROKERS AND AGENTS

Cargo Conference

Eden Roc Hotel, Miami Beach, Florida

contact: 201-569-2882, Jeanne Cardona

[email protected]

www.asba.org

October 6-8

CANADIAN / AMERICAN BORDER TRADE ALLIANCE

Conference

Venue TBA, Washington, District of Columbia

contact: 716-754-8824, Jim Phillips

[email protected]

www.canambta.org

October 6-11

NATIONAL RESEARCH COUNCIL CANADA

International Railway Safety Conference

Fairmont Hotel, Vancouver, British Columbia

contact: 613- 993-0414, Marie Lanouette

[email protected]

www.irsc2013.org

October 8

R.P. LANDE MANAGEMENT

Transportation Innovation and Cost Savings Conference

Palais Royale, Toronto, Ontario

contact: 905-319-11244, Richard Lande

[email protected]

www.transportconference.net

October 9

THE CHARTERED INSTITUE OF LOGISTICS AND

TRANSPORT NORTH AMERICA

Sears of Canada – National Logistics Centre Tour

Sears Logistic Centre, Vaughan, Ontario

contact: 416-418-39990, Bob Armstrong

[email protected]

www.ciltna.com

October 9-10

PORTS OF INDIANA \ PURDUE UNIVERSITY \ CONEXUS

INDIANA

Indiana Logistics Summit

Indiana Convention Center, Indianapolis, Indiana

contact: 317- 232-9205, Liz Folkerts

[email protected]

www.indianalogistics.com

October 10

MARINERS’ HOUSE OF MONTREAL

Festa Italiana Lucheon

Iberville Marine Terminal, Port of Montreal, Montreal, Quebec

contact: 514-849-3234, Carolyn Osborne

[email protected]

www.marinershouse.ca

October 14

ASSOCIATION OF SHIP BROKERS AND AGENTS

Online Course-Commercial Trade Transactions

contact: 201-569-2882

[email protected]

www.asba.org

ADVERTISERS

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TRANSPORTATION CONFERENCE transportationconference com 44

PORT OF VANCOUVER FEATURECHAMBER OF SHIPPING OF B.C. cosbc.ca ..................... 20

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TYMAC LAUNCH SERVICE LTD. tymac.ca ........................13

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