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The U.S.’s second major offshore wind project received approval for construction and operation from the U.S. Department of the Interior’s Bureau of Ocean Energy Management (BOEM). South Fork Wind, which will be located off the east end of Long Island and south of Rhode Island achieved the critical milestone in the federal environmental review on November 24, just a week after construction began on the U.S.’s first large offshore wind farm.

“We have no time to waste in cultivating and investing in a clean energy economy that can sustain us for generations,” said Secretary of the Interior Deb Haaland. “Just one year ago, there were no large-scale offshore wind projects approved in the federal waters of the United States. Today there are two, with several more on the horizon,” as part of the government’s plan for 30 GW of offshore energy by 2030.

The Record of Decision documents grants to South Fork Wind, by BOEM and the National Marine Fisheries Service within the National Oceanic and Atmospheric Administration, approve the plan to install 12 or fewer turbines located approximately 19 miles southeast of Block Island, Rhode Island, and 35 miles east of Montauk Point, New York. The ROD adopts a range of measures to help avoid, minimize, and mitigate potential impacts that could result from the construction and operation of the proposed project.

South Fork Wind remains on track to be fully permitted by early 2022 according to joint venture partners Ørsted and Eversource. Prior to construction, South Fork Wind must submit a facility design report and a fabrication and installation report to BOEM. These engineering and technical reports provide specific details for how the facility will be fabricated and installed in accordance with South Fork’s approved plan for construction and operations.

“With the achievement of this critical federal permitting milestone, construction of this historic wind farm is expected to begin in the weeks and months ahead,” said David Hardy, Chief Executive Officer of Ørsted Offshore North America

The South Fork Wind team is now gearing up for site preparation work and the start of construction, beginning as early as January 2022, on the project’s underground transmission line. Fabrication of the project’s offshore substation is already in process. Offshore installation of the project’s monopile foundations and 11-megawatt Siemens-Gamesa wind turbines is expected to begin in summer 2023. 

The 132 MW offshore wind farm will serve Long Island when it begins operations at the end of 2023. Its transmission system will deliver energy to the electric grid in the Town of East Hampton providing power for approximately 70,000 homes. 

The United Nations trade and development agency, UNCTAD, is warning that global consumer prices will rise significantly in the year ahead until shipping supply chain disruptions are unblocked and port constraints and terminal inefficiencies are tackled. In newly issued reports, they are saying that the global economic recovery is being threatened by high freight rates and the residual effects of COVID-19 on the shipping industry. They are calling for immediate investing in ports and infrastructure as well as urgent attention from flag, port, and labor-supplying states to end the crew change crisis which is threatening the positive outlook for the maritime trade.

“The current surge in freight rates will have a profound impact on trade and undermine socioeconomic recovery, especially in developing countries, until maritime shipping operations return to normal,” said UNCTAD Secretary General Rebeca Grynspan. “Returning to normal would entail investing in new solutions, including infrastructure, freight technology, and digitalization, and trade facilitation measures.”

The mismatch between surging demand and de facto reduced supply capacity. UNCTAD says has led to record container freight rates on practically all container trade routes. UNCTAD’s analysis shows that the current surge in container freight rates, if sustained, could increase global import price levels by 11 percent and consumer price levels by 1.5 percent between now and 2023.

Their analysis also shows that the impact of the high freight charges will be greater in small island developing states, which could see import prices increase by 24 percent and consumer prices by 7.5 percent. In the least developed countries, UNCTAD reports that consumer price levels could increase by 2.2 percent.

According to the report, the surge in container freight rates will add to production costs, which can raise consumer prices and slow national economies, particularly in smaller and lesser developed countries, where consumption and production are highly dependent on trade. The high rates will also impact low-value-added items such as furniture, textiles, clothing, and leather products, whose production is often fragmented across low-wage economies well away from major consumer markets. UNCTAD predicts consumer price increases of 10.2 percent in these categories.

UNCTAD emphasizes that transport costs are also influenced by structural factors, including port infrastructure quality, the trade facilitation environment, and shipping connectivity. For those reasons, UNCTAD is urging a portfolio of measures that span hard and soft infrastructure and services. 

“Improving the quality of port infrastructure would reduce world average maritime transport costs by 4.1 percent, while costs would be reduced by 3.7 percent by better trade facilitation measures and by 4.4 percent by improved liner shipping connectivity,” write UNCTAD.  It calls on governments to monitor markets to ensure a fair, transparent, and competitive commercial environment and recommends more data sharing and stronger collaboration between stakeholders in the maritime supply chain.

At the same time, in a parallel report, UNCTAD raises concerns about the continuing pandemic-induced strains of the maritime industry, including the crew change crisis, saying that it is creating “mounting risks and uncertainties” for maritime trade which in turn could have far-reaching effects. Saying that supply chain bottlenecks have hindered economic recovery, among the actions they are calling for continuing focus on maritime operations including crew changes to help address issues ranging from shortages of equipment and containers, less reliable services, congested ports, as well as longer delays and dwell times.

“By exposing the vulnerabilities of existing supply chains, the COVID-19 disruption has sharpened the need to build resilience and revived the debate over globalization and the supply chains of the future,” said Shamika N. Sirimanne, UNCTAD’s director of technology and logistics.

They highlighted positive results, including the drive for digitalization and automation, “which should deliver efficiency and cost savings.” They, however, also point to trends such as reshoring and nearshoring that could produce hybrid operating models involving just-in-time and just-in-case supply chains which could require more flexible shipping services.

The UN trade organization concludes that the trends at play have implications for vessel types and sizes, ports of call, and distances traveled. They see the possibility for new business opportunities for shipping and ports. UNCTAD says global economic recovery will depend on smart, resilient, and sustainable maritime transport.

After days of torrential rains pounding the Pacific Northwest, the Port of Vancouver, Canada reports that rail service has been suspended due to flooding and washouts impacting the rail lines inland in British Columbia. It marks the second time this year that the port has had its rail service suspended due to natural disasters and comes as they are already struggling to keep up with the surge of cargo through the port.

The deviation from the rains has been widespread across Canada’s western province. So far, authorities report that they have recovered the body of one person that was killed in a mudslide while many others are feared missing or killed. One eyewitness said that at least 10 cars were swept off one of the major highways in British Columbia. The Royal Canadian Mounted Police reported only seven of the cars have been located while across the province thousands of people have been moved into temporary facilities due to the widespread flooding. BC’s Minister of Public Safety, Mike Farnworth, said in a briefing on Monday that they believed as many as 80 to 100 cars and trucks were trapped on another major highway in the province.

BC Transportation Tweeted out photos showing large sections of the earth washed away from under the rail tracks at various points across the province. Both Canadian Pacific and Canadian National Railway confirmed that they have been forced to suspend service in British Columbia due to damage to the tracks. They said they were no reports of injuries or losses on their systems, but due to the unsafe conditions had not yet been able to reach the damaged areas to begin to assess repairs.

Containers led in total tonnage, while LNG, LPG, vehicle carriers and dry bulkers drove overall growth, leading to strong results for FY21 amid continued supply chain disruptions and a transition to sustainable shipping

Panama City, Panama, October 28, 2021 – The Panama Canal closed its fiscal year 2021 (FY21) with a record-breaking annual tonnage of 516.7 million Panama Canal tons (PC/UMS), coming in 8.7% higher compared to the 2020 fiscal year (FY20) and 10% above tonnage registered in FY19, the waterway’s last pre-pandemic fiscal year. 

“I am grateful for and proud of our world-class workforce, whose resilience and dedication allowed us, throughout the pandemic, to continue providing a service of excellence and enabling the uninterrupted delivery of essential goods around the world,” said Panama Canal Administrator Ricaurte Vásquez Morales. “This commitment was key in our ability to manage a record tonnage, which reinforces the Expanded Canal’s value to global trade after five years of successful operations.”

FY21 Performance in Detail

Fiscal year 2021 was marked by unprecedented supply chain challenges caused by the continued impact of the COVID-19 pandemic. Related disruptions drove container rates to rise exponentially and production to slow down across various sectors, due to raw material shortages. Amid this landscape, the Panama Canal saw traffic grow between October 1, 2020 and September 30, 2021, driven by liquefied natural gas (LNG), liquefied petroleum gas (LPG), containerships, dry bulkers, and vehicle carriers.

LPG and vehicle carriers followed LNG in segment growth, closing FY21 with an 18.4% and 15.6% increase in tonnage through the waterway, respectively. While the latter saw growth in FY21, vehicle carriers are yet to fully recover from the pandemic-driven dip in traffic, similar to passenger vessels, which are expected to continue their gradual return to the waterway in FY22. Their return will be supported by proposed modifications to the segment’s tolls, which are expected to be approved in the coming weeks.

The main trade routes using the Panama Canal by tonnage in FY21 included the U.S. East Coast – Asia, followed by the U.S. East Coast – West Coast of South America, West Coast of South America – Europe, South America Intercoastal, and the East Coast South America – Asia route, the latter of which replaced the East Coast U.S. – West Coast of Central America route in the Canal’s top five routes. South Korea also moved up the ranks to become the fourth top user of the waterway this year, preceded by the United States, China, and Japan, with Chile coming in fifth.

All in all, the Panama Canal recorded a total of 13,342 transits in FY21, driven by an increase in Neopanamax transits. Though their average size increased, Panamax transits declined in total, an anticipated shift accelerated by the impact of the COVID-19 pandemic, as shipping lines consolidated more cargo onto larger ships to decrease frequent transits. To help facilitate this transition, the Panama Canal increased the maximum allowable length (LOA) for vessels transiting the Neopanamax Locks, a move made possible by the waterway’s experience operating the Expanded Canal. The waterway also began offering a 50-foot draft, the highest level allowed at the Neopanamax Locks. Achieved through effective water management and an increase in rainfall, the higher draft ultimately increased the waterway’s capacity to maneuver larger and heavier vessels.

Looking Ahead – Securing a Sustainable Future

The Panama Canal also advanced its commitments to accelerating the decarbonization of shipping in FY21. In January 2021, the Panama Canal announced the creation of the CO2 Emissions Dashboard, which calculates the carbon dioxide (CO2) emissions saved by vessels that choose to transit the Panama Canal over the most likely alternative route. Building on these and other longstanding efforts, the waterway then committed in April 2021 to becoming carbon neutral by 2030, with plans already underway to invest roughly $2.4 billion in modernizing its equipment and infrastructure to meet this commitment. The Canal will also spend $2.8 billion in maintenance, as well as $500 million in digital transformation initiatives to maximize its capacity and value offered to customers for years to come.

The Panama Canal is working on its roadmap outlining the specific steps it will take to reach carbon neutrality by 2030, from generating electricity from renewable sources to migrating the Canal’s fleet to electric vehicles and hybrid tugboats. The Canal will also explore a pricing strategy that promotes the efficiency and low-carbon emissions of the ships that transit the waterway, as well as participate in the upcoming 2021 United Nations Climate Change Conference (COP26) and IMO Marine Environment Protection Committee (MEPC77) meetings.

A coalition of 19 countries including Britain and the United States on Wednesday agreed to create zero emissions shipping trade routes between ports to speed up the decarbonization of the global maritime industry, officials involved said.

Shipping, which transports about 90% of world trade, accounts for nearly 3% of the world's CO2 emissions.

U.N. shipping agency the International Maritime Organization (IMO) has said it aims to reduce overall greenhouse gas emissions from ships by 50% from 2008 levels by 2050. The goal is not aligned with the 2015 Paris Agreement on climate change and the sector is under pressure to be more ambitious.

The signatory countries involved in the 'Clydebank Declaration', which was launched at the COP26 climate summit in Glasgow, agreed to support the establishment of at least six green corridors by 2025, which will require developing supplies of zero emissions fuels, the infrastructure required for decarbonization and regulatory frameworks.

"It is our aspiration to see many more corridors in operation by 2030," their mission statement said.

Britain's maritime minister Robert Courts said countries alone would not be able to decarbonize shipping routes without the commitment of private and non-governmental sectors.

"The UK and indeed many of the countries, companies and NGOs here today believe zero emissions international shipping is possible by 2050," Courts said at the launch.

U.S. Transportation Secretary Pete Buttigieg said the declaration was "a big step forward for green shipping corridors and collective action".

Buttigieg added that the United States was "pressing for the IMO to adopt a goal of zero emissions for international shipping by 2050".

The IMO’s Secretary General Kitack Lim said on Saturday "we must upgrade our ambition, keeping up with the latest developments in the global community".

Industry needs regulatory help
Jan Dieleman, president of ocean transportation with agri business giant Cargill, one of the world's biggest ship charterers, said "the real challenge is to turn any statements (at COP26) into something meaningful".

"The majority of the industry has accepted we need to decarbonize," he told Reuters.

"Industry leadership needs to be followed up with global regulation and policies to ensure industry-wide transformation. We will not succeed without global regulation."

Christian Ingerslev, chief executive of Maersk Tankers, which has over 210 oil products tankers under commercial management, said it had spent over $30 million over the last three years to bring their carbon emissions down through digital solutions.

"We need governments to not only back the regulatory push but also to help create the zero emissions fuels at scale," he said.

"The only way this is going to work is to set a market-based measure through a carbon tax."

Other signatory countries are Australia, Belgium, Canada, Chile, Costa Rica, Denmark, Fiji, Finland, France, Germany, Republic of Ireland, Japan, Marshall Islands, Netherlands, New Zealand, Norway and Sweden.

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