INTERNATIONAL SHIPPING streamlining and lower procurement costs will translate into more competitive shipping rates. Japan and Canada currently exchange over $25bn worth of goods and raw materials per year, and continue to seek an Economic Partnership Agreement in a bid to further boost this figure. THE Alliance will certainly be watching these negotiations with interest, especially with the Trans-Pacific Partnership now apparently on the backburner. When interviewed at the recent Gastech Conference near Tokyo, a Government of British Columbia official stated that “while THE Alliance raises concerns from a competition perspective, it is too early to speculate what the impact on Canadian container shipping might be.” In the medium-term, however, the indications are that THE Alliance may share at least part of its destiny with that of the West Coast. Since the devastating earthquake and tsunami in March 2011, Japan has practically shut down its nuclear reactor network and sought to make up the resultant energy shortfalls with vast quantities of imported LNG. A quarter of the world’s LNG fleet currently rests in Japanese hands, and over 70 per cent of this belongs to THE Alliance. Canada’s recent drive towards LNG production has been well-documented, with the March 2017 edition of the LNG Journal reporting that no fewer than 12 LNG projects are scheduled for start-up within the next seven years. Significantly, the LNG Canada project, which aims to build an LNG export terminal at Kitimat, is co-sponsored by the Mitsubishi Group, which has a definite interest in the success of former subsidiaries NYK Line and K Line. THE Alliance may also play a significant role in delivering greener and more hi-tech ships to the West Coast. The member firms have been more proactive than most in responding to the impending challenge of global Sulphur caps, which will take effect as of 2020. January 2017, for example, saw the official compliance certification of the Hybrid Sulphur Oxide (SOx) Scrubber System, installed aboard K Line’s large-scale car carrier Drive Green Highway. Significantly, the core components of the system can be housed in an ISO shipping container, thus reducing installation times and increasing efficient use of deck space. 32 — BC Shipping News — May 2017
Meanwhile, NYK has generated headlines by commissioning Japan’s first LNG-fuelled ship, the Sakigake. When operating in LNG mode (instead of diesel), Sakigake’s dual engines were recorded as emitting 30 per cent less CO2, 80 per cent less NOx and virtually no SOx at all. The ship also opens up the possibility of LNG bunkering, whereby a ship can be fuelled by another vessel from the seaward side in ports which find it impossible to install LNG piping in each berth. Not to be outdone, MOL received its first ever Methanolpowered ship last year, designed by the Mitsui Engineering and Shipbuilding Company. Plans for liquid hydrogen vessels designed by Kawasaki Heavy Industries are also in the pipeline. Finally, in the last few days it has been announced that MOL’s “IT-based Visualization of the Inboard Environment Project” has been selected for official government support by Japan’s Ministry for Land, Infrastructure and Transport, as part of the national “Assisted Projects for Advanced Shipping Safety Technology Development” initiative. The project seeks to provide crew members with wearable headset technology equipped with AR and VR features capable of enhancing operational support and technical capabilities respectively. The technology will form part of MOL’s Smart Ship Project, which also aims to develop an Automatic Forecasting System for Ocean Weather Conditions.
Allied to success?
According to container freight price benchmarking index Xeneta, THE Alliance will face an initial testing phase. Cargo price competition is expected to be stiff from the rival Ocean Alliance, while K Line is still seeking to re-establish trust after several customer orders were booked on Hanjin ships which were subsequently seized. However, the fact that member firms have established a large contingency fund to avoid a Hanjin-style collapse should ensure that Alliance vessels will be a familiar sight on the West Coast for the foreseeable future. Chris Gould began his journalistic career at the UK-based Daily Telegraph, before branching out into magazine publications after relocating to Japan in 2008. He currently both writes and translates material on a number of business topics and can be reached at christopher.gould@hotmail.co.uk.