Tuesday, November 2, 2010

FIDLEY WATCH: Sending Business North

Chris Philips, Managing Editor

At press time it’s a beautiful fall day in the Pacific Northwest. The leaves are beginning to turn but the days are still warm enough to stroll without a jacket. The Seattle Times tells us the economy is improving, and the upcoming elections promise to bring a welcome change to Washington DC.

We live in an amazing country, which spans an entire continent and boasts warm-water, year-round ports on three coasts. We have a vibrant commercial maritime and shipbuilding sector, especially on the West Coast. It’s hard not to be optimistic. And yet…

On page 8 of this issue we discuss a civil complaint filed by the US Department of Justice on behalf of the Environmental Protection Agency against San Diego’s NASSCO shipyard. The yard is accused of installing engines in 46 commercial and military vessels that did not have a “certificate of conformity” showing that the power plants meet US emission standards.

The suit, which is the first federal court action brought by the United States under marine diesel engine rules, doesn’t allege that the powerplants do not meet emissions standards – only that they lack the required documentation claiming they meet the standard.

The DOJ and EPA hope to collect fines of at least $1.5 million from the San Diego yard.

While our government is working to make US-built vessels more expensive, another story in this issue, also on page 8, reveals that Canada has waived its 25 percent import tariff on general cargo vessels and tankers, as well as ferries longer than 129 meters. The story notes that the move is expected to save Canadian shipowners some C$25 million (US$24.8 million) per year over the next decade.

Canada’s Minister of Transport, Infrastructure and Communities, says the move will accelerate the modernization of the Canadian fleet by replacing aging vessels with cleaner, safer and more efficient ships.

Recent new deliveries to Canada from West Coast shipyards include tugboats for Seaspan and Minette Bay Shipdocking. The removal of Canada’s import tariff combined with the relative strength of the Canadian dollar could make the sale of larger vessels from US yards a possibility as well.

Meanwhile, the largest CMA CGM vessel ever to call at a Canadian port, the 8,500-TEU CMA CGM Figaro, arrived last month in Vancouver. The ship is deployed on the Columbus loop, a pendulum service linking China and Korea to Pacific Northwest and Canada as well as the US East Coast via the Suez Canal.

The vessel boasts environmental features including equipment to plug into shore power and a “fast oil recovery system,” which enables bunkers to be recovered from the vessel’s fuel tanks without having to open a hole in the vessel’s hull. The ship also features an electronically controlled engine, reducing oil and fuel consumption by respectively 25 percent and 3 percent.

Unlike ships built in San Diego, the CMA CGM Figaro, delivered in April of this year, was built in Korea by Samsung Heavy Industry and therefore can deliver freight from Asia to British Columbia without having to hold an EPA-issued certificate of conformity.

The relaxing of Canadian tariffs could present US shipbuilders a unique opportunity to compete with Asian and European builders for the Canadian market, but the EPA’s suit against NASSCO acts to restrain commerce, rather than promote it.

With the US economy as fragile as it is, rather than saddling American companies with ever more restrictive standards, shouldn’t the Federal Government be removing barriers to trade?