Maritime Training Blog

Understanding Trade History as a Tool for Assessing Supply Chain Risk

Posted by Terence Nicholas on 28 April 2015 | 0 Comments

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TPPThe U.S. Congress may soon vote on a bilateral free-trade agreement between the United States and Japan. This is part of the Trans-Pacific Partnership (TPP), a 12-nation partnership to include Japan, and represents the most recent chapter in trade relations between the U.S. and Asia. 

Such trade partnerships facilitate global shipping routes, and with cargo shipped from Asia representing more than 40 percent of global maritime trade, the importance of such a trade agreement is further amplified. Yet, even while this trade agreement is developing, regional maritime tensions continue to persist in the South China Sea, through which some of the world’s most critical trade routes pass.      

Despite the territorial disputes over the South China Sea, Asia is still a critical trade region for the United States. China and Japan are two of the top five trading partners in the region. Of the top 15 countries the U.S. currently exports to, six are Asian. Understanding the origins of trade routes provides context for assessing issues of supply chain risk by providing the international relations framework for why shipping routes are established and what countries have interests in protecting them. In light of the developing TPP bilateral trade agreement, let’s look at a brief history of the origins of trade relations between the U.S. and Japan. 

In 1853, Commodore Matthew Calbraith Perry, from Newport, Rhode Island, led an expedition to Japan that resulted in the eventual opening of trade relations between the United States and Japan, through the signing of the Treaty of Kanagawa. The relationship between the U.S. and Japan forged from Commodore Perry’s expedition was a historical milestone in the development of our trade relations with Asia in the 19th century.

Perry’s expedition arrived in Japanese waters on July 14, 1853, with a squadron of four U.S. Navy ships to deliver a letter from the President of the United States to the Emperor of Japan. He returned the following spring to receive the Japanese government’s response, and the Treaty of Kanagawa was signed on March 31, 1854. The treaty ensured the safe treatment of stranded American sailors in Japan, as well as the use of Japanese ports for resupply. It also laid the groundwork for diplomatic and future trade relations, like the pending Trans-Pacific Partnership free-trade agreement between the U.S. and Japan.

In honor of this historic event for both United States and Japanese maritime trade, the expedition is commemorated in Newport and its sister city Shimoda, Japan, one of the two ports opened to the U.S. by the treaty, every year with the “Black Ships Festival”.

Understanding the geopolitical aspects of maritime trade from both an historical and current international relations perspectives provides a framework for assessing risk in the global supply chain.  If the TPP bilateral trade agreement is approved, it will serve to deepen the historic relationship between U.S. and Japan and may encourage the approval of a similar trade agreement with Europe through the Transatlantic Trade and Investment Partnership (TTIP). The TPP also serves to increase global economic access to the other Asian partnership nations.

USMRC is an independent nonprofit organization with a niche focus specializing in navigation safety, maritime risk mitigation, human capital development and raising awareness of international shipping, maritime trade and transport.

USMRC is expanding the perspective of risk in the maritime environment to incorporate all factors that could inhibit maritime operations, present a threat to trade, and disrupt the global supply chain.

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Precision Piloting: The Mooring of an Ultra Large Container Ship

Posted by Terence Nicholas on 27 February 2015 | 0 Comments

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container ship pixa smallShip size vs. port capacity is a dynamic issue that has garnered a lot of attention recently, see article on Port of Santos, particularly as more 18,000 TEU + Ultra-Large Container Ships (ULCS) are being brought into service. When assessing the demand for an ULCS cargo capacity at a port, understanding the operational impact on a port of such a ship size is critical element of that assessment.

Researching the piloting requirements for mooring a ULCS offers the best assessment of whether a port can handle such class of ship. Through the use of modeling and simulation, pilots are able to conduct risk assessments and understand the ship handling challenges of maneuvering a ULCS to a berth, prior to doing the job. The ability to experiment with various atmospheric conditions and implement various tug-handling configurations also allows the pilots to determine the optimal arrangements and safety limitations for maneuvering these vessels.

USMRC recently worked with a pilot group from a Mediterranean port to assess the limiting conditions for mooring a ULCS, at a port where no ULCS had called before. The pilots also did not have experience handling these vessels.  The objective of the research was to conduct proof of concept for vessels, risk assessments and set safety parameters for maneuvering these vessels.

The pilots were confronted with moving a 400 meter ULCS to a berth using a turning area, which had approximately a 450-meter diameter to maneuver. The margin for error was extremely small and in some of the scenarios the pilots simulated it was determined that the mooring maneuver could not be performed safely under prevailing environmental conditions.  The simulations yielded scores of discoveries to include a potential option of modifying existing pier infrastructure, to provide sufficient clearance to successfully maneuver the ship.

Another one of the findings from the simulation research was that for a ULCS to berth within the designated basin, which had berths on both sides, one side of the basin must remain vacant for ULCS arrivals and departures. Despite the operating restrictions identified in the research, the pilots were able to determine that it was possible to bring a 400 meter ULCS into the port. The result of the simulation research also highlighted a port efficiency constraint; namely, the reduction in number of ships able to be handled while a ULCS is moored.

As new ports are being developed, particularly in regions where port infrastructure is being upgraded to handle larger ship classes, the desire to bring in larger container ships to maximize throughput of cargo may be tempered by the operating capacity of a port.

At USMRC, we also have observed new port designs change through the course of simulation research, because the research results of the pilot simulation testing demonstrated the parameters by which the maneuvers could be performed safely.  This type of research has proven to be a critical risk assessment tool for our clients and has, in some cases, saved millions of dollars in investment or showcased significant design changes that needed to be made.  

 

 

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Changing global trade dynamics: The New Silk Road

Posted by Terence Nicholas on 18 February 2015 | 0 Comments

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The terms “Maritime Silk Road,” “New Silk Road” and “Revival of the Silk Road,” in a harkening to the ancient trade route, are appearing with considerable frequency in publications within the logistics profession, whether they are referring to development of railway or shipping routes between Asia and Europe.

In recent years, the maritime portion of the revived Silk Road has expanded beyond trade between Europe and Asia to include trade routes to Africa and other nations around the Indian Ocean.

The shipping routes established in the last year or so between Africa, Asia and the India subcontinent highlight a continued increase in trade relations between Asia and Africa most notably, but also expansion of Indian trade routes with nations in the Middle East, East Africa and Myanmar.

The establishment of these new shipping routes – primarily container shipping –coincides with ongoing development of port facilities that provide strategic access points to hinterland logistics networks around the Indian Ocean. The most prominent observation of these new service lines is that the majority originate in Asia and service multiple ports along the African coastline.

This is not a coincidence, as development in the sub-Saharan African economy, though private equity raised funds, was more than double in 2014, at $4 billion, than annually raised private equity funds over the previous six years, according to an article published in the Jan. 24 issue of The Economist.

As noted in an article that appeared in the Dec. 12, 2014 issue of the Journal of Commerce, container volume to Africa increased 21 percent over the past two years. This infusion of private equity funds is needed to develop an infrastructure in Africa that can keep pace with trade between the interior of the continent and the coastal ports.

Development of logistics hubs along Africa’s coastlines will link the African continent to the trade flow across the Indian Ocean, and in some respect could be viewed as an extension of the “New Silk Road,” of which China has been the primary champion. 

This leads to a secondary development from the shipping service routes established in 2014. While China has been promoting a revival of the Silk Road, India has begun its own revival of “historical trade ties,” as reported by the Deccan Chronicle in an interview with Shipping Corporation of India (SCI).

This has been part of the policies geared toward establishing India’s role as a major player in the Indian Ocean, a body of water they view with strategic importance. These efforts include revival of trade relations with Myanmar, with whom China is currently their biggest trading partner. India also has funded development of the Port of Chabahar in Iran as a conduit to Central Asia, mirroring China’s port development in Pakistan’s Port of Gwadar.

A final development to be noted has been the waffling of the Sri Lankan government regarding the lease of land at the Port of Colombo to China. The proposed 99-year land lease to the Chinese government presents the new Sri Lankan government with a delicate foreign relations balancing act. While Sri Lanka seeks to continue developing economic ties with China, it also is striving to maintain ties with India, which views the lease with concern to their influence in the Indian Ocean.

The political and economic issues outlined above can have great impact on these newly established shipping service routes.  As the political and economic factors continue to develop, they will impact the risk calculus for establishing future trade routes in these regions as well.

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Confronting Vulnerabilities to Maritime Cybersecurity

Posted by on 3 December 2014 | 0 Comments

Cybersecurity is an ever-growing threat to the maritime industry. Just like hackers have managed to infiltrate the computer systems of major retailers, hospitals and even banks, they pose a growing and potentially greater threat to the maritime industry because of the implications surrounding the safety of mariners and the environment as well as economic and national security.

Although technology has advanced at a rapid pace, security and resilience have not kept up with these advancements. The world’s economy depends on the shipping industry, which in turn is equipped and dependent on critical systems and processes, such as electronic navigation. And, right now there simply is not enough emphasis being placed on cybersecurity.

Shipboard systems, such as navigation, dynamic positioning, propulsion, cargo management, and administration are more integrated, complex, and IT-based than ever before. Yet, there are no known global standards and IMO-mandated certifications of shipboard IT-based critical systems. Failure to upgrade systems and create an industry standard has left ships vulnerable and potential targets of cyber intruders.

Integrated critical navigation systems, such as Electronic Chart Display Information Systems (ECDIS) and Automatic Radar Plotting Aids (ARPA), Automated Identification Systems (AIS), and GPS have known vulnerabilities. Cyber disruptions to equipment essential for maintaining a proper lookout and determining if risks of collision exist will be a major problem if not dealt with now.

Blank Rome’s Cyber Security Watch’s recent blog, “Maritime Cyber Security: A Growing threat Goes Unanswered” correctly asserts that our industry is far behind the curve in cyber security.  It also recommends that certain guidelines be followed, such the “Framework for Improving Critical Infrastructure Cybersecurity” and “The National Infrastructure Protection Plan”. 

The two most important security instructions and resources to the maritime industry are the International Ship and Port Facility Security Code 2003 (ISPS) and the Maritime Transportation Security Act of 2002 (MTSA).  Both do not yet provide cybersecurity protocols or security direction, instruction, or guidance to the maritime industry. 

As a component of USMRC’s holistic and operational approach to maritime risk mitigation, we are focusing concerted and enduring efforts on understanding and confronting vulnerabilities to maritime cyber resilience.  The cyber world is a very difficult dimension to comprehend.  It is not only an abstract, or a non-traditional dimension for the mariner, it also is a global phenomenon.  This phenomenon is further complicated by innumerable complexities within international trade, maritime operations, and the environment.

It is time to start looking at how we can protect equipment, limit access and respond to threats from hackers should there be a cyber attack. The United States Maritime Resource Center is committed to raising standards to protect the lives of mariners, ships and cargo, and the environment.  We have a plan to confront vulnerabilities in maritime cybersecurity and resilience, and we’re taking action. 

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Washington State Ferries looks to LNG as a fuel source for the future

Posted by on 13 November 2014 | 0 Comments

After completing a nearly four-year analysis and evaluation, along with several detailed studies, Washington State Ferries (WSF) is asking the U.S. Coast Guard to use liquefied natural gas (LNG) as a fuel source.

WSF has sent the U.S. Coast Guard a letter of intent and Waterway Suitability Assessment (WSA) calling for the conversion of six of its Issaquah Class vessels to LNG propulsion. This would entail retrofitting LNG fuel tanks on the top decks. These vessels would be supplied by deliveries from LNG over-the-road tank trucks. The refueling operations would occur at the following WSF ferry terminals: Southworth, Bremerton, Kingston, Clinton and Anacortes.

According to its report, WSF believes that “LNG provides an opportunity to significantly reduce both fuel costs and pollutant emissions.” WSF also believes that the timing is right because the use of LNG as a marine fuel for passenger ferries “has been proven technically and operationally feasible for over a decade.”

By law, the Captain of the Port, Coast Guard Sector Pugent Sound will review and validate the WSA in cooperation with key port stakeholders and issue a letter of recommendation to the State of Washington Department of Transportation regarding the suitability of the waterway for LNG marine traffic.

During this review process, the U.S. Coast Guard is asking for public comments which can be submitted to the online docket via www.regulations.gov, or reach the Docket Management Facility, on or before January 12, 2015.  Once the Coast Guard issues a letter of recommendation, WSF would have to seek legislative approval and funding to move forward with its plans.

As North America’s largest ferry operator, WSF reports that it burns nearly 18 million gallons of fuel each year and that in 2012 it’s fuel budget was nearly 30 percent of its entire operating budget. By converting to LNG, WSF has said it will result in substantial savings and could significantly reduce propulsion-related emissions.

Click here to read an updated executive summary of the study and conversion plans.

USRMC’s Maritime Simulation Institute has more than three decades of experience focusing on the Liquefied Natural Gas (LNG) sector.  We were the first in the United States to recognize the need for training for LNG as a marine fuel. One of our key goals is to mitigate risk for the maritime industry through training and operations research.

As the demand for LNG grows MSI will continue to work to address the needs of local, state and federal players by being at the forefront of safety and education in the LNG arena. We will continue to follow up on the progress of WSF's efforts and provide updates.

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Maritime industry steps up precautions in wake of Ebola

Posted by on 13 October 2014 | 0 Comments

As fears over the deadly Ebola virus continue to grow, the global maritime industry is making sure that every precaution is taken to ensure safety.

British authorities reportedly have begun monitoring vessels heading for the UK that have visited ports in countries where the Ebola virus has been reported. The Maritime and Coastguard Agency reports that if symptoms of Ebola are thought to be present, the ship will be asked to divert to the nearest suitable port where the person thought to have contracted Ebola will be handed in a controlled manner.

Brazil´s health surveillance agency reported that shipments from Ebola-hit countries would undergo thorough inspections.

The U.S. Coast Guard has said it will screen individuals coming into the United States via ships from Ebola hot spots. It put out a safety information bulletin last month referencing symptoms, how the disease is contracted and what to do if someone is suspecting of contracting Ebola.

In September, the authority running the Panama Canal announced it would monitor the last 10 port calls of all vessels arriving there.

Thousands of cases of the deadly disease have been reported in three African countries: Guinea, Sierra Leone, and Liberia. However, as cases begin to be reported in other parts of the world, the maritime industry is stepping up its efforts to prevent it from spreading

It is imperative that the industry has plans in place to make sure that crews are kept safe or, if a case of Ebola is detected shipboard, that every effort is made to contain it to keep everyone else with whom the crew member has come in contact with from contracting the disease.

USMRC is in the business of risk mitigation. Our training teams comprise a range professionals with a wide variety of real-world maritime experience on both sides of the gangway. The risks of Ebola spreading via the gangway need to be assessed and addressed by ports, terminals, vessel owners and crew members as the situation continues to unfold.  Any training program developed to reduce this risk should involve outreach, awareness, and the sufficient levels communication between stakeholders.

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As LNG terminal construction grows, so does need for training

Posted by on 10 October 2014 | 0 Comments

As of September 10, 2014, the U.S. Department of Energy (DOE) had approved nine applications for permits to export liquefied natural gas (LNG) to non-free trade agreement nations. There are currently 22 pending applications, covering 21 facilities where U.S. businesses are seeking to build and operate terminals to process LNG for sales abroad, according to the American Petroleum Institute. Another nine facilities in the U.S. have already been approved.

Any time a new terminal is constructed, or the design of an existing one is changed, the use of simulation to ensure that the changes/construction are done properly not only can be helpful, but also can result in cost savings.

The Maritime Simulation Institute can develop new geographic databases that can help to ensure that the planned design accounts for issues that may come up once the facility is completed such as making sure there is enough room for a ship to dock properly or turn around in port.

Over the past ten years, the Maritime Simulation Institute has conducted more than 40 highly specialized, real time, man-in-the-loop, full-mission bridge simulation evaluations involving Liquefied Natural Gas (LNG) export/import, tanker, dry bulk and container terminals and marine facilities.  In each case, we built the geographic area database model, as well as the ship models and tugs used for escorting/ship assist support.

These computer generated simulation models have been verified by our staff and validated by pilots and vessel masters who have significant experience with the actual ships in the specific port whenever possible. 

Our internal verification and external validation process for modeling is highly thorough and comprehensive and the resulting model is one that achieves the desired degree of fidelity.  Our clients consistently find great value in the accuracy of the data and subsequent reporting produced from the simulations. 

Our port development research capability supports the following general scope of work areas:

  • Terminal design evaluation – proof of concept
  • Simulation studies and new ship design trials
  • Evaluations of berthing layout options
  • Dredging plan/turning basin/channel design studies
  • Port / terminal/waterway/navigation assessments
  • Establish operating limits and tug power requirements
  • Familiarization training for harbor and docking pilots
  • Emergency and casualty procedures testing and validation

 

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Soliciting stakeholder comments/feedback on draft IGF Code

Posted by on 26 September 2014 | 0 Comments

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The International Maritime Organization's (IMO) Subcommittee on Carriage of Cargoes and Containers (CCC 1) met September 8-12 to finalize its draft of the International Code of Safety for Ships Using Gases or Other Low-Flashpoint Fuels (IGF Code).

This draft (click here to read) will be forwarded next month to IMO's Maritime Safety Committee (MSC 94) for approval, with possible adoption at MSC 95 in Spring 2015.

The IGF Code is being created to provide mandatory provisions for the arrangement, installation, control and monitoring of machinery, equipment and systems using low flashpoint fuels, such as liquefied natural gas (LNG), to minimize the risk to the ship, its crew and the environment.

The subcommittee agreed that the new IGF Code should apply to new ships and existing ships converting from the use of conventional oil fuel to the use of gases or other low-flashpoint fuels, on or after the date of entry into force of the code.

The code would not apply to cargo ships of less than 500 gross tonnage, but the provisions of the IGF Code could be applied to such ships on a voluntary basis, based on national legislation.

The only items outstanding are square-bracketed text in sections 5.3.3, 5.3.4 and 5.7.1 associated with protective fuel tank and piping location – an issue that was specifically referred to MSC 94 for resolution.

The maritime industry is invited to review the draft and provide comments/input. There is still an opportunity for the U.S. Delegation to raise last-minute substantive issues in the draft to MSC 94.

If you have any issues that you would like considered relative to the IGF Code draft please submit no later than Oct. 1, 2014 to Tim Meyers at the U.S. Coast Guard. timothy.e.meyers@uscg.mil, or (202) 372-1365.

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MARAD study finds need for LNG bunkering guidelines

Posted by on 9 September 2014 | 0 Comments

The Maritime Administration recently released a new study on LNG bunkering that points out the need for regulatory policies and safety standards.

As we have previously stated the increasing popularity of liquefied natural gas use is providing a unique opportunity for maritime training institutes worldwide including MSI.

The study points out that because the use of LNG as a maritime propulsion fuel is a relatively new concept in the U.S., there are significant safety and regulatory gaps as well as challenges related to the development of a national infrastructure for LNG bunkering.

 The report states: “Infrastructure development as well as vessel transition to LNG propulsion will be driven by tighter environmental regulations and price differences between conventional fuels and natural gas. Because the development of infrastructure is acutely dependent on the needs of specific ports and stakeholders, there is no single bunkering option.”

 Margaret Doyle, vice president of development and LNG solutions at the Maritime Simulation Institute, reviewed the recommendations and agrees that the key to successful implementation of LNG as a marine fuel is developing best practices and infrastructure.

 MSI has developed an LNG training course and is already taking the lead on LNG training. We are capable of implementing many of the recommendations that have come out of the report including the following:

  • Analyze the types of vessels that utilize ports in the U.S. to determine what bunkering methods will be necessary.
  • Identifying ports where LNG bunkering infrastructure would be in the national best interest.
  • Develop a methodology for and conduct a quantitative port-wide navigational risk assessment to determine how changes in the type of vessels and frequency/density affect the safety and security of the public, workers, critical infrastructure, and commercial operations.
  • Conduct a port risk assessment to identify and quantify alternative strategies to overcome technical barriers and mitigate risk to an acceptable level (as per EN1473 or NFPA 59A).
  • Incentivize first movers that establish LNG bunkering infrastructure in ports of the nation’s best interest through an Environmental Ship Index that defines a scale for financial rewards.
  • Identify strategic port locations along the U.S. coasts to avoid populated, tourism, military, and protected areas.
  • Encourage initial developments that promote flexibility on the LNG supplier for bunkering to different types of vessels.
  • Develop an interagency working group to identify and develop management strategies and mitigation opportunities for potential.
  • Perform a comparative risk assessment study of the safety aspects for large-scale truck transport to port locations vs. large-scale rail transport to port locations vs. natural gas pipeline and local liquefaction.
  • Conduct an optimization study that assesses the optimal infrastructure build-out to provide LNG bunkering for both high-frequency, low volume transfers and low frequency, high volume transfers more efficiently.
  • Evaluate LNG bunkering site availability as demand increases for more high frequency, low volume transfers.
  • Involve stakeholders throughout the development of LNG bunkering and co-locating LNG bunkering with multimodal uses.
  • Assess the effectiveness of mitigation strategies (such as training, gas detection, firefighting capability, and emergency response) against potential incidents arising from co-locating bunkering activities with other uses of LNG.
  • Perform a detailed study of potential routes for LNG transportation (truck, rail, and pipeline) that avoid densely populated areas and identify emergency response capabilities along the route.

All of MSI’s LNG course development is in accordance with the draft amendments to Chapter V of STCW Convention scheduled to be approved by IMO in November 2014. 

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Guidelines, Requirements & Training for Vessels Carrying Natural Gas as Fuel

Posted by on 4 September 2014 | 0 Comments

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Margaret Kaigh Doyle, our VP of Development, presented on LNG at the 2014 All About Marine Conference on September 4, 2014.  For a copy of her slide presentation, please click here or the image below. 

allaboutmarineconference

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