Trans-Talk

The 185,000 DWT Alaskan Navigator, an oil tanker with capacity of 1.3 million barrels that sails between Valdez, Alaska and American west coast ports, is undergoing repairs in Port Angeles, WA after a crack in its outer hull was discovered at sea. The inner hull of the double-hulled ship was not breached and no oil spilled.

There have been previous reports of manufacturing defects on the Alaskan Navigator and its three sister ships owned by BP Oil.

Opponents of Enbridge’s Gateway Pipeline terminal in Kitimat, cite the incident as an indicator of potential damage from a proposal to accommodate 220 ship calls a year in Douglas Channel. An estimated 25 per cent of ships would range to 320,000 dead weight tonnes, 50 per cent in the range of 120,000-200,000 tonnes and 25 per cent in the range of 80,000-120,000 tonnes. (Sources: http://www.vancouversun.com/supertanker+hull+crack+raises+concern+increased+traffic+coast/6087898/story.html#ixzz1lFpnAxjL; MarEx Newsletter, http://media.tmmarket.com:81/marex/media/newsletter/archives/old/readmore0ff7.html?issue_id=207&article_id=1969&l=%3C)

Port Metro Vancouver says it has no long-term plans to expand operations on Agricultural Land Reserve farmland — but Richmond Mayor Malcolm Brodie doesn’t believe the agency.

Read more: http://www.vancouversun.com/news/Richmond+mayor+wary+Port+Metro+Vancouver+farmland+plans/6087681/story.html#ixzz1lFdeEKoJ

The Port’s CEO Robin Silvester has added fuel to a public spat over the future of the 80-hectare Gilmore Farm with proponents of British Columbia’s Agricultural Land Reserve (ALR). The issue came up when the Port bought the property south of No. 8 Road and Westminster Hwy. in 2009. The farm abuts an existing Port property of 240 hectares. Silvester has begun speculating on its removal from the ALR as he publicizes the Port 2050 plan for expansion, which favours the “Great Transition” as the best of four future scenarios used in the planning exercise.

Port Metro Vancouver

Under Bill 14, the BC Ferry Commission (the “Commission” or the “Commissioner”) has been mandated by the Province of BC to conduct a review (the “Review”) of the Coastal Ferry Act (the “Act”) as it relates to the regulation of ferry operators. The objective of the Review is to recommend to the Minister of Transportation and Infrastructure changes to the Act which will better enable the Commissioner to balance the interests of ferry users with the financial sustainability of ferry operators.

The review’s report from Ferry Commissioner Gordon Macatee makes 31 recommendations, many of which would increase the Commissioner’s power to decree and implement fare and capital adjustments. He also advocates removal of user-pay provisions in the current Ferry Act and a return to the cross subsidization of minor routes which, along with Northern routes, don’t attract enough traffic to be self-supporting.

BC Minister of Transportation and Infrastructure Blair Lekstrom says he supports the recommendations and that new Premier Christy Clark’s Liberal government is generally amenable under its “family first” policies.

However, according to The Driftwood:

Members of the Ferry Advisory Councils are not as excited about the review as might be expected, however, according to Salt Spring’s FAC (Ferry Advisory Council) chair Harold Swierenga.

“I’m glad to see it, yes — we have absolutely no problem with the review being conducted — but the underlying problem as far as we can see is outside its terms of reference,” he said Tuesday.

“That’s our only beef — but it’s a big one.”

Swierenga said ferry fares have gone up about four times the rate of inflation in recent years, and as a result ridership is down.

The fix to fare increases won’t come by finding B.C. Ferries a way to pinch a few more pennies in its spending, he said, and in any case a review by the Comptroller General has already found the company is well managed.

The problem that isn’t being addressed by the review, he said, is the government’s subsidy or contribution amount, which has not been raised since the corporation was changed in 2003.

(Sources: http://www.bclocalnews.com/vancouver_island_south/saltspringislanddriftwood/news/122542288.html; Sechelt Coast Reporter, “Commissioner’s report calls for change“)

The report is a 104 pp., 879 KB download.

Canadian Pacific Railway (CPR) saw its 2011 full-year profit fall 12% to $570 million from 2010’s $651 million, while its operating ratio (total revenue divided by total operating costs) increased from 77.6% to 81.3%.

CEO Fred Green, targeted for replacement with retired CN (Canadian National) CEO Hunter Harrison by dissident investor Bill Ackman, promises to reduce CPR’s operating ratio to below 72% by 2014. CN’s operating ratio for 2011 was 63.5%. Green cites mountain grades steeper than CN’s track system as the main handicap faced by CPR.

CPR’s annual general meeting (AGM) is on May 17, 2012 in Calgary.

• Summary of CPR’s 2011 financial results, with link to full report.
• Summary of CN’s 2011 financial results, with link to full report.

WestJet today announced that it will offer seven non-stop flights each business day between Toronto and New York City’s (NYC) Laguardia Airport starting June 4, 2012, and increasing to eight flights in July. WestJet successfully bid $17 million for the slots in Nov-2011.

The service will take advantage of a newly-signed code share agreement with Delta Airlines, which got a number of LaGuardia slots from the same tender and subsequently added the airport as a new hub in its network. Delta’s new Laguardia service also starts in July 2012.

WestJet will try to entice traffic to the new route by letting its loyalty program members travelling between Toronto-Montreal and Toronto-Ottawa between January 30 and March 31, 2012, earn discounts on future flights to LaGuardia.

WestJet’s entry into the Toronto-NYC market adds a fourth side to the vicious fight by WestJet, Air Canada (AC) and Porter Air for market share in the eastern triangle of Toronto-Montreal-Ottawa. This week AC and Porter both announced pre-emptive additions to their own Toronto-NYC routes.

AC will launch triple-daily, non-stop flights between Toronto Pearson and New York City’s John F. Kennedy International Airport beginning May 3, 2012 and also increase its Toronto-Laguardia service to hourly flights on business days. Counting AC flights to Newark, NJ (across the river from NYC), AC plans to offer 23 daily flights during peak periods.

Porter will bump its schedule of Toronto-Newark flights from the current 11 flights to 13 daily roundtrip departures from Billy Bishop Toronto City Airport, and also tweak the timing of its flights. (Source: company news releases)

On Jan. 11, Vancouver Airport Authority (YVR) opened Canada’s first Ground Run-up Enclosure (GRE), a massive three-sided steel facility that will reduce noise from engine run-ups conducted as part of regular aircraft maintenance.

Transport Canada regulations require operators to test engines and their components before an aircraft is put back into service after maintenance.

The GRE re-directs noise up rather than out, while also absorbing it through specialized side panels perforated by several louvered vents. It is the first structure of its kind at a Canadian commercial airport, and is an integral component in YVR’s Noise Management Plan.

Image provided by Vancouver Airport Authority

The 67- by 80-metre enclosure will be used primarily by Airport South maintenance operators testing propeller aircraft such as Dash-8, Beech 1900, Saab 340, Otter and Metroliners. The majority of YVR’s engine run-up noise complaints are related to propeller aircraft, which constitute 65 per cent of runs-ups at YVR. The facility will be used mostly at night from 10 PM to 6 AM. It also has a glycol recovery system for de-icing of propeller aircraft during winter operations.

The $12-million facility, standing as tall as a five-storey building, is located adjacent to YVR’s South Terminal. It will cut engine run-up noise heard in nearby residential neighbourhoods by up to half.

Jet Engine Run-ups

YVR’s procedure for jet engine run-ups will remain the same. The operator is assigned a specific location on the airfield and a heading for the run-up. The location and heading is intended to ensure that the run-up is conducted safely and to minimize noise disturbances to those living in the immediate vicinity of the airport.

YVR has a Noise Management Program consisting of published noise abatement procedures, community noise information seminars, an airport noise monitoring and flight tracking system and a complaint management and response system. The 24-hour YVR Noise Information Line is at 604-207-7097.

WestJet today announced it is considering the launch of a new short-haul, regional airline as early as 2013 using a fleet of approximately 40 smaller, turboprop aircraft.

WestJet’s current fleet consists entirely of Boeing 737s, while competitors Air Canada Jazz and Porter Air fly Bombardier Q400s which have lower operating costs.

Privately held Porter flies 70-passenger Q400 turboprops exclusively and claims it made a full-year profit in 2011. Porters says it can break even with a load factor of 55% versus 71% for WestJet and 79% for Air Canada. (http://business.financialpost.com/2011/10/23/porter-airlines-edge/)

All three airlines compete most fiercely on the Eastern triangle of Toronto-Ottawa-Montreal.

See this previous post for basic specifications of the Q400.
                                         

The grounding and capsizing of the Costa Concordia cruise ship on the Italian island of Giglio on January 13th, and the subsequent deaths of six passengers (16 others are unaccounted for), has focused debate on the safety of cruise ships generally.

According to Nautilus International, the maritime professionals’ union, some safety issues have been exacerbated rather than solved, by the shape of modern cruising. “The alarm bells have been ringing with many of us for well over a decade now,” says Andrew Linington, Nautilus’s communications director. “These ships are floating hotels – skyscrapers, really. The design has been extrapolated from that of smaller ships: they have high sides, a small draught [the depth below the waterline] and are very difficult to manoeuvre in high winds.”

Ship design has focused on building ever more upper deck cabins, shopping malls and pools that test stability compared to traditional ocean liners. The Concordia, by some measure the biggest casualty to date, is dwarfed by new behemoths such as the Allure of the Seas, which can carry more than 6,000 passengers and 2,000 crew.¹

With each passing day, the ship’s captain, Francesco Schettino has looked more blameworthy. After disputing accounts that he had abandoned ship before passengers were evacuated, Schettino is today accused of taking over the controls and steering the ship closer to the island than its computer navigation programming allowed. The BBC has reproduced a graphic from Lloyd’s List that illustrates just how far off course the ship was on Jan. 13 compared to its previous voyage of Jan. 6.

The Concordia represents 10.2% of Costa Cruises capacity and 1.6% of parent company Carnival Cruises’ fleet capacity. Carnival estimates its own costs of the disaster at $95 million USD. However, insurers costs will be much higher, possibly as much as $800 million. That would make the Concordia the world’s most expensive marine disaster, surpassing the Exxon Valdez’s current record of $500 million.

• Carnival’s corporate web site.
• Costa Cruises U.K. web site with company communications on the Concordia.

(Sources: Toronto Star, “Captain’s stunt may have led to cruise ship’s grounding“; Bloomberg.com, “Generali, RSA, XL Said to Insure Concordia for 405 Million Euros“; ¹The Guardian, “Costa Concordia shows size does not make modern cruise ships impregnable“)

CP Rail (CPR) has been drawn into a fight with American William Ackman over control of the company’s board, management and strategic planning. Ackman became CPR’s largest shareholder in 2011 after acquiring 14% of the shares at a cost of $1.4 billion.

In December 2011 Ackman refused a seat on CPR’s board of directors because he wouldn’t promise to desist from hostile action against the company. Ackman has begun a proxy fight to take control of CPR and install Hunter Harrison (former Canadian National Railway CEO) in place of CPR’s current chief executive, Fred Green. CPR’s current board of blue-chip business names rejects both actions as counter productive to the railway’s profitability. (Source: Globe and Mail, 2012-01-10, page B1, “The CP Battle Begins”)

If you are in Vancouver on January 27, you may be able to get Mr. Green’s point of view. He’s speaking to the Vancouver Board of Trade on “the challenges presented by boosting productivity and discusses how global competitiveness is changing the role of supply chains.”

Event Details - Vancouver Board of Trade presents Fred Green

Date: Friday, January 27, 2012

Time: Registration: 11:45 a.m.; Lunch & Program: 12:15 – 2 p.m.

Location: The Fairmont Hotel Vancouver – British Ballroom, 900 Georgia Street West, Vancouver

Tickets: Members - $79 + HST; Future Members - $110 + HST

Online Registration Ends: January 25 - after this date, please call 604-640-5470 to check availability.

On-site registration surcharge (if seats available): Additional $15

The Railway Association of Canada (RAC) has released its annual review of member railways’ aggregate statistics, 2011 Rail Trends (823 KB, pdf).

Capital investment by the RAC’s member companies totalled $1.7 billion in Canada in 2010, up $181 million or 11.9 per cent year-over-year, reflecting the sector’s generally positive view of economic conditions.

A reflection of the recovering economy, operating revenue increased $1.2 billion or 12.2 per cent, to $10.8 billion in 2010, the second highest on record. Freight revenue of $9.6 billion in 2010 exceeded 2009’s freight revenue by $1.1 billion or 13.3 per cent. Revenue from intercity, rail commuter and tourist passenger services totalled $673 million in 2010 compared to $627 million in 2009, a $46 million or 7.3 per cent increase year-over-year.

Intercity passenger miles (kilometres) amounted to 877 million miles (1,412 million kilometres) in 2010, 1.9 per cent less than the year before and 9.1 per cent lower than a decade earlier. The average length of journey in 2010 was 204 miles (328 kilometres), almost unchanged from a year earlier.

The RAC represents 50 goods, tourist, commuter and intercity rail businesses (including all Class 1 and regional carriers) and has about 45 associate member suppliers and partners.