Tag: United States

JUNE 2017 BUSINESS RESILIENCE PLAN IN THE MARITIME SECTOR

Resilience planPlans de continuité des activités

Introduction

This article is not a pedagogical guide or a scientific method for carrying out Business Resilience Plans (BRP). Rather, its objective is to highlight elements specific to the maritime sector.

Readers interested in acquiring further knowledge may refer to several excellent documents. (ex. Community Resilience Planning Guide )

This article is divided into two parts. The first provides a definition of a BRP. The second, focuses on a BRP in the maritime sector.

 

Part 1: Business Resilience Plan in General

1.1 What is a Business Resilience Plan (BRP)

A BRP’s goal is to ensure resumption and continuity of an organization’s activities following an event that disrupts its normal operation. It must allow an organization to meet legislative, regulatory or contractual obligations as well as economic requirements (risks of losing market share, survival of the company, image, etc.) following a particular event. Building BRP also includes identifying potential threats to an organization and applying a framework to ensure the organization’s resilience.

This type of plan has become, over time, an industrial standard rather than an exception. Increasing criminal and terrorist acts, transportation of dangerous products, risks of accidents damaging environment and health are among the causes. Most large and medium sized companies currently have some plan developed, to respond to a major situation. Many of them would face closures if their services were interrupted for any period without such a plan.

A BRP can forsee compliance control measures and an higher frequency of controls. Howerver, its main purpose is not to predict the nature of such measures to be implemented in order to prevent them. The is rather identified as a prevention plan, generally subject to a set of standards or regulations.

It should be noted that losses due to natural or man-made disasters are becoming increasingly important in Lire la suite

WILL TRUMP’S ENERGY POLICY STOP DEVELOPING RENEWABLE ENERGY ?

1-Significant efforts to reduce greenhouse gases around the world

For several years, significant efforts have been made to promote renewable energies. It has been arduous and time-consuming to implement commitments of the Kyoto Protocol and the Conferences of the Parties (COP) United Nations Framework Convention on Climate Change. Almost 20 years were needed to develop concerted action on this issue among the world’s major countries. 1

The Paris Agreement of 2015 (COP21) is historic because it engages 195 countries to reduce emissions of greenhouse gases and to stabilize climate warming due to human activities to less than 2 ° C by 2100. [1]The main means used is the gradual elimination of fossil fuels, the main source of air pollution. It is estimated that global emissions of greenhouse gases (GHG) has reached nearly 49 billion tons of equivalent of CO2 in 2010 (latest data from IPCC ), increasing by 80% between 1970 and 2010.

The 2016 conference in Marrakech [2] reinforced the commitments of 2015 accelerating the adoption of the modalities by two years. The next conference will be held in Poland in 2018 and will provide an opportunity for several countries, such as Canada, Germany, Mexico and possibly the United States, to present their strategic plan.  [3]

Trump compromises 20 years of effort

However the election of Donald Trump has changed the situation and compromises effort of 20 years. Any global agreement cannot be held without the participation of all the major economic blocs lsuch as United States, China or Europe. The United States backing down could have a detrimental effect on other countries for reasons of competitiveness: the cost of producing fossil fuels is still lower than other types of renewable energies. The difference of costs can be regarded as unequal competition. In short, for this reason, the … Lire la suite

The real impact of CETA: Global Economic and Commercial Agreement  

CETA

CETA WILL GIVE ACCESS TO 500 MILLION CONSUMERS

The Government of Canada claims that the Canada-EU Comprehensive Economic and Trade Agreement (CETA) will give Canadian companies preferential access to 500 million European consumers, a market evaluated at $ 18 trillion[1] [2]. Accordingly, bilateral trade would increase by 20 percent and would increase Canada’s GDP by $ 12 billion a year. This would create nearly 80,000 new jobs and increase the average Canadian household’s annual income by $ 1,000. [3]

Are these predictions realistic ? What are the business opportunities for transport and maritime companies? In order to answer these questions, this text analyses the figures of Canada’s international trade with the rest of the world and the European Union. It also attempts to estimate the impact of this agreement on transportation and the Canadian marine industry.

1-SUMMERY OF THE AGREEMENT

The CETA is considered a modern and innovative agreement because it covers a wider field of activity and is more permissive than other free trade agreements, such as the WTO’s General Agreement on Trade and Services (GATS) or NAFTA. The main provisions concern directly or indirectly the maritime sector.

1.1 Non-discriminatory rules for the goods, services and public procurement sectors

The rules of the “national treatment” and the “most favored nation” are maintained for both the goods sector and the service sector. The first rule requires equal treatment between foreign firms and local businesses. The second rule provides that the signatory parties must give each other at least the same advantages as they would accord to a third State.

CETA also provides that Parties may not adopt or maintain measures to limit the number of enterprises, the value of transactions, the number of transactions or natural persons, and the participation of foreign capital.

1.2 Elimination of tariffs and

Lire la suite

JANUARY 2017, MARITIME REVIEW, TRENDS FOR 2017

conjoncture 2017

INTRODUCTION

As 2016, three trends will describe maritime industry in 2017: 1-an increased volatility of demand 2- a sustained but uneven global recovery 3- a restructuring of the maritime supply.  This text presents an analysis of these trends.

1- An increased volatility of demand

1.1 New external factors

Variability of the risk makes demand for transport less predictable. In 2016, several factors triggered this instability, including fluctuations of exchange rates, slowdown of Chinese economy, lower oil prices and difficulties of the European economy.

In 2017, recovering of American and European economies is well engaged. Despite a slight slowdown of the GDP of the United States in the last quarter of 2016, one can anticipate a still dominant position of the U.S. dollar will continue in 2017.  The impact of a strong U.S. dollar boost U.S. imports.

In return, other external event to the industry are related to international political situation. The intention of Donald Trump to review several agreements of free-trade (NAFTA and the transpacific Partnership), the vote on the Brexit inducing the exit of Great Britain of the European Union are some examples.  The rise of protectionism could have the effect of undermining the global economic recovery.

In the sector of maritime transport, two important events occurred in 2016, the bankruptcy of Hanjin Shipping and the opening of the new Panama Canal.

Some believe that Hanjin Shipping’s bankrupcy it is precursor to a major crisis (Gerry Wang, CEO de Seaspan) in the industry. Hanjin’s situation is not unique and other maritime companies are also in difficulty. Because, recessions are the result of a chain process, if other bankruptcies were to happen, the effects could be devastating on the financial institutions, the clients or suppliers and shippers. It could even slowdown entire world economic activity.

In the case of the … Lire la suite

November 2016 Transportation by barge as an alternative to intermodal transport

Use of transportation by barge

The systems of transportation by barge have long been used as an alternative to land transport. This mean of transportation is competitive to trains and trucks. In addition, it significantly allows the reduction of the environmental footprint of the transport of goods.

There are two major segments in the market, long and the short distance.

Long-distance is used in large rivers, such as Mississippi, Rhine, Danube and St Lawrence in transporting the goods from one end to the other of the continents.

This system is competitive to trains and trucks, but its performance depends greatly on the quality of the underlying infrastructure and the interconnection of the navigational channels. In return, barges offer the advantage to adapt to different types of products transported and allow more flexibility for the navigation on the various courses of water. They offer capacities ranging from 350 to 11 000 tonnes of deadweight and use proven technologies.

On short distances, this type of transport is growing and presents new opportunities.  Pilot projects have demonstrated this effectiveness, in particular, to reduce congestion in the areas of access to port sites of international trade.

Despite the high volume of activities and the economic benefits that flow from port activities, access to facilities remains constrained due to the movement of trucks and trains. The comings and the goings of land vehicles pose a problem by the noise, air and ground pollution, and by the loss of time related to the traffic congestion. In addition, the congestion of port activities reduces the effectiveness of the supply chain by increasing the time of distribution of the goods to the markets of destination.

To solve these problems and, as a counterweight to the costly alternatives that the investments represent in the construction, enlargement and the optimization … Lire la suite

October 2016 Strategy for the Great Lakes and St.lawrence River Martime Transportation System

Context of the Conference

On June 15 in Detroit, Michigan, United States governors and premiers of Canadian provinces made public the first “regional strategy” designed to increase shipping in the Great Lakes and St. Lawrence river. This strategy proposes an integrated vision of the maritime system of the Great Lakes and St. Lawrence and calls for better coordination of decisions between different jurisdictions and cooperation.

It plan to double marine trade, reduce the environmental footprint of the transport network in the region and support its industrial core. The strategy is expected to boost the regional economy by 5 000 billion US $ and create jobs in all regions.

grands-lacs-images-de-la-conference

The conference

The Conference of Governors and Premiers of the Great Lakes and St. Lawrence (Conference) is a North American organization created in 1983 to encourage and facilitate environmentally responsible economic development in this region. Its action aims to promote regional cooperation agreements on issues of common interest, including the protection and restoration of the Great Lakes, water management, control of invasive species, international trade and the economic development the development of the maritime economy and tourism.
The work of the Conference concerns environmental protection and also economic development.  In 2009, in order to highlight environnemental priorities, President Barack Obama launched a restoration program with a fund of US $ 2 billion.

The nine key environmental priorities are the follwing: 

  • Ensure the region’s prosperity by growing the economy and creating jobs through the efficient use of the Great Lakes – St. Lawrence River maritime system.
  • Maintain and continuously improve a world-class regional transportation network with an integrated maritime system.
  • Establish a regional framework for achieving shared objectives, launching collaborative initiatives and leveraging funding opportunities for the maritime transportation system.
  • Improve the efficiency, competitiveness and resiliency of maritime transportation and the region’s multimodal
Lire la suite

AUGUST 2016 FOR THE DEVELOPEMENT OF SHIPBUILDING INDUSTRY

A WINNING MARITIME STRATEGY

Can governments contribute to the development of the shipbuilding industry without resorting to public procurement? In a North American context, can we gain market share on Asia, the dominant player in this field?

A report released by researchers at the National Defense University (Eisenhower school) in the spring of 2015 partially addresses these issues. [1] It concludes that they are competitiveness problems in the  U.S. industry against Asia. China, Japan and South Korea now occupy more than 80% of the market share of shipbuilding on the commercial segment contracts.

Analysis of the strengths, weaknesses, opportunities and threats (SWOT), [2], highlights the importance of the national defense budget to compensate for the weaknesses of U.S. industry in the commercial segment.

Currently, this industry survives almost exclusively  on public procurement, notably with the military sector. It represented 38.1 billion $ in 2014, and is expected to grow annually by 3.9% per year until 2019, or 46 billion $. Barely 15% of revenues of the U.S. industry are related to the export.

One of the flagships of the report recommendations is that,  in order to ensure predictability of revenues of the industry, a strategy of public long-term purchases is necessary, as what presumably has been done in Canada. [3] However, an approach which uses public procurement for economic development purposes may have some shortcomings: it makes governments abdicate the implementation of structural measures for commercial market development; it distorts the objectives of a public policy of national defense in favor of strictly economic ones and, ultimately, undermines the efforts of the industry to increase its productivity, which would make it more competitive commercial international markets.

We must recognize that government contracts are important to ensure and maintain shipbuilding industry’s development. But dependence on collateral in the long term, as … Lire la suite

JULY 2016 – THE CONDITIONS FOR SUCCESS OF THE NEW PANAMA CANAL

The Panama canal

Introduction

On June 26, the Government of Panama announced, with great fanfare, the completion of the expansion of the Panama canal. It was a historic event for this small Central America country. The crowd was awaiting the traverse of the first container ship, a Cosco ship from Asia, measuring 300 meters long, 48.25 metres wide and capable of carrying 9 500 containers (TEUS): two times the maximum capacity of the old locks.

62 international delegations were invited to listen to the speech by President Juan Carlos Varela Rodríguez. The event reflected the project: the Panama canal plays a strategic role in international maritime transport. For the population of Panama, expectations are high, since this project will hopefully revive the country’s economy and restore the market share lost over time to the Suez canal.

Although the promotional campaign of the Panamanian Government is fully justified, studies on the impact of the project leave many elements imprecise and uncertain. The complexity of the world situation and the state of international trade which has evolved in recent years may explain it.

According to research conducted jointly by The Boston Consulting Group and C.H. Robinson, as much as 10 percent of container traffic between East Asia and the U.S. could shift from West Coast ports to East Coast ports by the year 2020. Other research also suggests that the expansion of the canal will impact the trade of bulk, especially between Asia and America.

However, several market conditions are necessary for the achievement of these forecasts. The following text presents an analysis of these conditions.

The role of Panama

A strategic location

The Panama canal plays a strategic and undeniable role in global transportation. It significantly reduces the distance required for the transport of goods. Transportation costs are substantially reduced, as are the price … Lire la suite

THREE MARITIME TRENDS FOR 2016

INTRODUCTION

At the beginning of 2016, the world economy is unsettled.  Stock markets are volatile and investors are worried.

Since recession of 2008, the maritime industry has had to restructure. A period of uncertainty and instability triggered by the rise of the U.S. dollar, slowing Chinese economy, collapse of oil prices, slowdown of the European economy and political uncertainties has ensued.

This analysis illustrates that the trends of the shipping industry are positive and encouraging. They predict that growth will remain higher than that of the world economy and will still continue and business opportunities will continue to present themselves. Three major trends are described: one,  the volatility of demand, another related to the the world economy, and a third,  maritime supply and public investments.

TREND 1: High volatility of demand

This first trend is due to globalisation which has increased the variability of risk. Such a ‘butterfly effect’, a simple modification of the conditions of the market in a specific area of the globe – for example in Asia – can have an impact on the supply and demand in different locations – for example in the United-States. This situation leads to less predictable demand for transport.

The fact remains that the maritime industry is, more than any other type of industry, sensitive to all forms of external disturbances, and particularly to international situations. These external variables over which the industry has no control, affect the ability of the industry to plan and structure itself to develop in the long term. Thus, changes in rates of Exchange and interest rates, changes in Government legislation, stock market declines can, in a single year, have important repercussions on the request and on the volume of the substances carried. Other external and unpredictable factors in the industry are equally important and … Lire la suite