Shipping industry leaders are warning that Michigan’s sour economy could take another hit if state officials move forward with a landmark plan to regulate ballast water in oceangoing ships.

Starting Monday, the Michigan Department of Environmental Quality will be the first in the nation to require ocean ships that load and unload cargo at Michigan ports to have a special ballast water permit.

As part of that permit, ships that plan to discharge ballast — the water vessels take on for stability after unloading cargo — must have approved technology on board to treat their ballast and kill any organisms they might be carrying from foreign waters.

But as of Wednesday, not a single ship owner or operator has applied for a permit, and shipping officials said it’s possible none will. Rather than spend hundreds of thousands of dollars on ballast treatment technology they say hasn’t yet been approved by the U.S. Coast Guard or International Maritime Organization, ships will just go to other nearby ports in Windsor or Toledo and avoid Michigan ports altogether.

“At the end of the day, we’re supportive (of protecting the Great Lakes from invasive species) but Michigan’s economy is on life support right now and the last thing we need to do is export jobs and make it more difficult for Michigan corporations to get their raw materials and that’s what’s going to happen,” said John Jamian, former director of the Detroit/Wayne County Port Authority and president of Seaway Great Lakes Trade Association, whose group has asked the state to delay the permits for a year.

Michigan lawmakers took action in June 2005 to crack down on ballast because for years the U.S. Coast Guard didn’t require ocean ships full of cargo — and only residual ballast — to conduct water exchanges at sea. Studies have shown organisms can still live in residual ballast and later find their way into the Great Lakes, crowding out native species and disrupting local ecosystems.

State officials insist they’ve given the shipping industry a year to prepare for the new permit system and they’re moving forward but keeping an eye on a bill introduced by Sens. Michael Prusi and Ken Sikkema would delay the permits until January 2008.

They say the four ballast treatment technologies they’ve approved — hypochlorite treatment, chlorine dioxide, ultraviolet light radiation and deoxygenation — are effective and environmentally sound. Estimates on the cost of the systems range from $100,000 to $300,000 per ship.

“Our interest here is not in any way to limit their ability to do business on the Great Lakes,” said DEQ Spokesman Robert McCann, who noted that it’s possible some ship operators may be waiting to get permits until the new shipping season starts in March. “But at the same time they have a responsibility as users of the Great Lakes to help us protect them. We’re asking them to make an investment in the Great Lakes and their ultimate health.”

Michigan is the first state in the nation to take such a bold approach to regulating ballast water, widely believed to be the culprit behind more than 60 percent of the roughly 180 non-native species now found in the Great Lakes, including the zebra mussel and sea lamprey.

The zebra mussel, a small mollusk that hitched a ride in a freighter from the Caspian Sea region in the 1980s, is probably the most well-known and destructive non-native species in the lakes. It has caused more than $3 billion in damage over the last decade, the DEQ estimates.

Michigan’s new law pertains mainly to residual ballast. Since 1993, the U.S. Coast Guard has required ocean ships that enter the Great Lakes to conduct a ballast exchange before entering the St. Lawrence Seaway, meaning they empty their tanks at sea and take on new water to flush out any foreign species. About 500 ocean-going ships, called “salties,” haul freight into the Great Lakes.

But ships full of cargo and only residual ballast were exempt from the Coast Guard’s regulations. On the Great Lakes, more than 70 percent of ocean ships fall into the “NOBOB” category, which stands for “No Ballast on Board.”

The Coast Guard changed its policy in 2005, instituting a voluntary exchange policy for NOBOB ships last year and Canada instituted a law in June this year that requires all ships, including those with residual ballast, to conduct exchanges.

Despite the NOBOB loophole, David Reid, senior physical scientist with the National Oceanic and Atmospheric Administration’s Great Lakes Environmental Research Laboratory in Ann Arbor, said research has shown that ballast exchanges are 90 to 95 percent effective in killing or transferring out organisms if conducted properly.

The problem with Michigan’s approach, he said, is that it’s not comprehensive and ships can still discharge ballast at ports in other states or provinces on the Great Lakes, possibly introducing new species in the same waters.

“There’s no big net around Michigan that keeps them out,” he said.

But it’s a starting point, insist environmental groups, who say they’ve waited long enough for the federal government to take a more proactive approach to halting the spread of invasive species in the Great Lakes.

“Each day that we delay, we run the risk of yet another exotic invader being introduced into our lakes,” said Sam Washington, executive director of the Michigan United Conservation Clubs.

Under the new permitting system, ships that don’t comply will face civil action and fines of up to a maximum of $25,000 a day. The DEQ won’t inspect every ship and will only have one person conducting random compliance checks, said Barry Burns, environmental quality specialist with the permit section of the DEQ’s water bureau.

But enforcement could be a moot point if ships stop coming to Michigan’s three primary ocean ports — Detroit being the largest, along with Monroe and Menominee — altogether. And shipping officials say that’s likely to happen because they’ll have no choice.

According to the Detroit/Wayne County Port Authority, the shipping of foreign goods through Michigan waters pumps $2 billion a year into the state’s economy. Steel is the biggest Michigan import and if ships have to unload cargo in Toledo or Windsor, companies will have to use trucks to get those raw materials, clogging roads and driving up prices for consumers, Jamian said.

SeverStal, the former Rouge Steel Co. in Dearborn, imports 300,000 to 400,000 tons of steel a year. If ships start avoiding Detroit, it would have an “enormous impact,” said one company official.

Still, state officials remain optimistic that they’re moving in the right direction. McCann said several states — Minnesota, Wisconsin and Indiana — are watching Michigan’s approach to see how it works. A similar permit system was introduced in Minnesota last year but no action was taken.

“Ultimately, this is leading by example,” McCann said.

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The latest Middle East addition to the container terminal industry, Oman International Container Terminal (OICT), is to have its international launch at the region’s premier maritime event in Dubai next month.
OICT’s brand new facilities, part of Oman’s US$ 12 billion Sohar Port development project, will be unveiled to a global audience at Seatrade Middle East Maritime (SMEM), at the Dubai World Trade Centre from December 4-6.

‘The terminal is ready for business with a capacity of 800,000 TEU, and the capability to go up to six million if required,’ said Jan Meijer, CEO of port operator Sohar Industrial Port Company (SIPC). ‘The terminal will receive her first vessel just before SMEM.’

OICT has commenced commercial operations ahead of schedule, transforming the former greenfield site into a world-class container handling facility.

Its ‘landlord’ business proposition combined with the adjacent deep-sea Sohar Port is expected to win substantial backing not only from SMEM’s extensive visitor base but from within its wide geographic exhibitor spread which this year encompasses over 250 companies from 32 countries.

Sohar’s geographical position in the booming triangle of Abu Dhabi, Dubai and Muscat combined with the ‘landlord port’ concept are seen as key selling points.

‘This is a distinctive concept within the region, global examples of which are in Rotterdam, Antwerp, New York and Singapore, and regionally in Saudi Arabia, Iran and India’ said Meijer.

‘This model maximizes the involvement of the private sector in port operations like tugs, pilotage, linesmen, stevedoring and warehousing. Because these companies are specialized they can offer quality and competitive rates while SIPC can concentrate on issuing rules and regulations and establishing the framework for health, safety, environment, emergency and security,’ he continued.

Sohar is being transformed into a thriving maritime and industrial hub. The port and container project is one of the largest of its kind in the world and forms a new chapter for a city with a rich maritime history. Eventually, the Port of Sohar will employ approximately 6,000 people directly and over 24,000 people indirectly.

SMEM 2006 is to be the largest in the history of exhibition and conference - now among the world’s fastest-growing maritime industry events with first-time participation from France, South Korea, Singapore and Bangladesh.

‘SMEM’s growth mirrors the maritime industry’s rising fortunes both internationally and regionally. The Middle East industry’s development is evidence by the fact that this year nearly 53% of exhibitors are from this region,’ commented Chris Hayman, Managing Director of Seatrade - the international maritime publisher and events organiser behind SMEM.

‘SMEM 2006 has grown by 23% on the 2004 edition and encompasses the vast spectrum of maritime activities and features new pavilions from the French, German and Pakistani industries.’

A three-pronged conference programme will run alongside SMEM 2006 which will include dedicated segments for the cruise, general shipping and SuperYacht sectors.

Meanwhile, the third Seatrade Dubai International Maritime Awards (DIMAs) will be presented at a gala dinner to coincide with SMEM 2006. The awards are the leading honours recognizing top industry achievers in West and Central Asia.

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Projects implemented by the Turkish Ministry of Transport in the last four years to increase shipyard capacity and efficiency have started to bear fruit.

The ministry took the shipyards’ demands for growth as their priority and development plans were approved by the Ministry of Public Works.

The Tuzla Shipyard and Tourism Co. has reached a capacity to build 45000 deadweight (DWT) ships.

Employment rose from 13,000 in 2003 to 28,500.

Shipbuilding capacity rose from 654,000 DWT to 1.4 million DWT.

The amount of sheet steel processed in shipyards has doubled.

Turkey’s worldwide market share in shipbuilding has risen from 0.9 percent to 1.4 percent; making Turkey fifth place in shipbuilding, right behind Germany who occupies fourth place with a share of 3.6 percent.

With these developments, the Turkish Ministry of Transport’s bureau for Maritime Affairs has expanded its goals.

Maritime Affairs’ new shipbuilding target for 2010 is now fourth place in the world.

Speaking to Zaman, Minister of Transport Binali Yildirim said: “Shipbuilding capacity has increased by an average of 65 percent in the last four years. The number of shipyards operating or about to start operating in Tuzla as well as in the Black Sea, Izmit Gulf, Yalova, in the Aegean or Mediterranean has reached 60. We used to build ships of up to 20,000 tons maximum but we are currently able to build ships of up to 60,000-70,000 tons.”

An additional 3,600 people have been employed in the last three years.

The steel processing capacity has increased by 306,000 tons.

Maintenance and repair capacity have also seen a considerable increase.

A million-ton yearly capacity has been reached with the restructuring of some other shipyards.

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Hamptons Post-Mortem: Now that the neighborhood is officially dead, isn’t it nice to remember those 3-acre estates with private marshes and cutesy docks and six-bedroom Mediterranean castles and “heated infinity pools” and spas and putting ranges and basketball courts? It really brings back some great memories. (Luxist)

Out in Queens, NYC is buying 24 acres of Long Island City waterfront for $100 million. There won’t be any spas, but 5,000 new units of housing is a good idea anyway. (Crain’s, via Real Deal)

In case you haven’t seen its 7,239,103 advertisements, Japan’s chic UNIQLO is opening a New York flagship on Broadway. Western designers will be designing the high-end (but inexpensive) sweaters and (slim) trousers. Hipsters rejoice. (New York Mag/D.I.)

There are over 500 people waiting to see the new condos at 365 Bridge Street–once called the New York Telephone Building, now “The Belltel Lofts.” Art Deco is so in right now. (Brownstoner)

But the mayor’s plan to “pimp” the Red Hook/Cobble Hill waterfront into a “maritime-themed tourist attraction” is not so popular. Why? Because it will kill Brookyln’s maritime industry. And because it’s a maritime-themed tourist attraction. (Brooklyn Papers)

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Vietnam has around 60 shipbuilding and repairs companies owned by Ministry of Transport, Ministry of National Defense, Ministry of Fisheries and the local provinces. VINASHIN is the dominating corporation with over 30 member companies involved in shipbuilding activities. The current growth rate in shipbuilding in Vietnam reaches 30 per cent annually, and today, Vietnam is able to build ships of up to 100.000T-250.000T.

In spite of fierce competition Norwegian suppliers, manufacturers and shipowners this year have shown strong interest in the Vietnamese market. In 2006, at least two Norwegian companies have established local representative offices in Vietnam, and many others are operating through local agents. In the beginning of November a one week promotional and study tour to Vietnamese yards and shipowners will be arranged.

The main shipbuilding hub in the North (Hai Phong and Quang Ninh) comprises around 60 per cent of the production, while large and new yards are being invested into and built in the central and southern areas.

Vietnam aims to be the 4th largest shipbuilding nation within 2015 and has recently committed 750 million USD in development projects in order to achieve this goal. VINASHIN recently was awarded big contracts from CRAIG, RAY shipping, Briese Schiffahrts, Damen Shipyards, Japanese and other major Vietnamese ship-owners. Current order books total around 155 ships. By 2010, the industry estimates an annual turnover of 1 billion USD and a production of 3 million tons of various ships. 60% of the ships equipment is expected to be supplied through local production.

Norwegian Maritime Promotional Tour in Vietnam Nov. 3 – 11, 2006

As a follow up to Vietship 06 exhibition in February 2006, a one week study tour is now being jointly organized byNorwegian Maritime Exporters (NME) and Innovation Norway Hanoi. It will include visits to Vinashin, major yards, and the major domestic ship-owner Vinaline. Twelve Norwegian companies representing essential components and services for the shipbuilding industry have committed themselves to attend the study tour with 17 participants. The purpose is to bring a cluster of Norwegian companies together under the NME and IN umbrella to present an attractive partner to Vinashin, other yards and Vietnamese ship-owners.

The companies will be able to present their products and services to both management level and technical staff, and pay a visit to relevant production facilities. Besides, possibilities for local production will also be investigated during the tour, with visits to relevant industrial parks. Vietnam has a skilled maritime labor force with low and very competitive labor cost. Therefore, Vietnam is a very attractive place for Norwegian companies to consider local production of ships’ equipment both for the Vietnamese market and for the global market.

Closer co-operation agreed
A major event during the week will be the signing of a Letter of Intent between Vinashin and NME.  The parties are considering entering into a closer co-operation to support Norwegian maritime companies in entering the Vietnamese maritime market, and to identify possible Vietnamese partners and ship yards. We assume the Norwegian participating companies should have a good chance to identify concrete business opportunities during the study tour.

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