World Grain -- May 2011 - 70

FEATURE: CWB BUYS GRAIN SHIPS

ﬂeet that moves bulk cargo on the Great Lakes. Since they operate in fresh water, these ships normally have a longer lifespan than ocean-going vessels and can last 40 to 50 years. Even so, they are in danger of becoming obsolete, particu-

way and Great Lakes that will take the industry beyond IMO standards and includes environmental issues such as: aquatic invasive species, pollutant air emissions, greenhouse gases, cargo residues, oily water, and issues arising

“We will receive a share of all the freight that’s moved within that pool, whether that’s Canadian Wheat Board grain, U.S. grain or non-board grain, and the same on the backhaul, whether it’s iron ore or whatever, we will receive a share of that.”
— Allen Oberg, chairman, CWB

larly when it comes to meeting today’s tougher environmental requirements. At present, most of the Canadian ﬂeet is 40 years or older and emission regulations that have been brought in since 1980 by various levels of government have created a multi-jurisdictional and complex legislative environment that is forcing major changes in the grain shipping industry. In the spring of last year, the International Maritime Organization (IMO) approved a joint American/Canadian Emission Control Area (ECA) application that will establish a zone extending 200 nautical miles from the Paciﬁc, Atlantic and Gulf coasts of the U.S. (excluding Alaska), Canada’s seacoasts (without the Arctic), French territories within North America, and the eight main Hawaiian Islands. When the ECA becomes enforceable in August of next year, vessels on the Great Lakes could be required to use fuel with no more than 1% sulphur content or achieve the equivalent in emissions reduction through cleaner engine technologies. Also, the legislation proposes that sulphur content or its corresponding reduction must be cut to 0.1% by 2015. GREEN MARINE INITIATIVE However, in a pre-emptive move, the shipping industry on both sides of the Canada/U.S. border has launched a voluntary program called Green Marine, covering the St. Lawrence Sea70

from ports and terminals (noise, dust, odors, and light). At last report, Green Marine initiative had attracted over 50 members. It’s expected that these new standards will result in a shift from residual fuel, or bunker oil, to reﬁned diesel oil for powering vessels, a change that the Canadian Ship Owners Association is ﬁghting to stop. The association is concerned that the additional costs of higher grade fuel will force bulk commodities such as grain from Lakers to other modes of transportation such as truck and rail. The lower emission grain freighters purchased by the wheat board have been designed by Canadian-based Algoma Central Corporation, which owns a ﬂeet of bulk carriers, product tankers and a diversiﬁed ship repair facility in Eastern Canada. The ships will be of the Equinox Class, built by the Chinese ﬁrm Nantong Mingde Heavy Industries located in the Yangtze Delta, with the ﬁrst ship scheduled to enter service in 2013. The state-of-the-art freighters are being constructed to meet the forwardlooking regulatory regime for lower emissions as well as ballast water management programs that are being put in place for Great Lakes shipping to prevent the spread of unwanted sea life and organisms between the lakes. In announcing the purchase, the wheat board said: • The new Equinox Class Lakers

will be able to carry signiﬁcantly more cargo and move faster than conventional vessels now running on the Great Lakes. • Newer engine technology will result in reduced fuel consumption, which means lower fuel costs and lower emissions. The new ships will emit 60% less emissions than the oldest steamships still transporting grain on the Great Lakes and about 40% lower emissions than existing motor vessels. • The new ships are designed to accommodate engine-exhaust gas scrubbers to further reduce emissions and accommodate ballast-water treatment solutions. This equipment will be installed once these technologies are fully developed to meet pending and anticipated new environmental standards, the statement said. In its business case, the board reminds farmers that its mandate is: “to maximize the ﬁnancial return to farmers from the marketing of their wheat and barley. Grain marketing includes transportation, which directly affects the competitiveness of Prairie grain in the world marketplace and, for that reason, directly impacts farmers’ returns.” It says the board conservatively estimates the net revenues, after costs of operation and maintenance, will be roughly $10 million per year, meaning the two vessels will have paid for themselves within seven years of having been put into service and will keep generating revenue for at least 25 years. The board also says it is optimistic about grain movements through the Great Lakes and Seaway: “CWBchartered lake freight to eastern Canadian ports has increased by about one million tonnes over the past decade, hitting 3.8 million tonnes in 2009. The CWB projects the export ﬂow of wheat to increase over the next few years as demand strengthens in Europe, Africa and Latin America — destinations served through eastern Canadian ports.” The Lakers will be managed by Seaway Marine Transport of St. Catharines, Ontario (recently acquired by Algoma
May 2011 / World Grain / www.World-Grain.com
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World Grain -- May 2011

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