Tag Archives: Shipping

Polar Shipping: A 2014 Recap

By Captain David (Duke) Snider, FNI FRGS
The year 2014 was indeed one of intriguing activity in the Polar Regions. The maritime world and public in general began the year captivated by the almost hourly updates from the Russian ship Akademik Shokalskiy, captive in the Antarctic Ice.  
 
Antarctic CaptivityIt certainly wasn’t the first time a ship had become beset in polar ice conditions, nor will it be the last. What caught the attention of the world was that modern technology and the thirst for a moment in the spotlight prompted regular Internet postings by blog and other means highlighting the “plight” of the ship from several onboard.  French and Chinese light icebreakers attempted to close the distance between open water and the beset ship but could not get sufficiently close to break her out. Even the United States Coast Guard’s Polar Star was diverted to assist. The decision was then made to fly a helicopter from the Chinese ship Xue Long to repatriate the hapless high paying passengers and “science party”. A short time later, having never declared a distress, and knowing the ice conditions would change, the Master and crew steamed clear of the ice under their own power. In the end, the Australian government shelled out nearly $2m Australian in “rescue efforts”. Shortly after the Akademik Shokalskiy steamed clear of the ice, the Russians felt the situation had been so distorted as to its danger in the press that a formal statement was made at IMO making it clear that the Akademik Shokalskiy and her crew were well suited to the conditions, and at no time in danger and that the Master of the vessel did not declare distress.

The Polar Code

The playing out of the Akademik Shokalskiy incident became a backdrop for more frenzied efforts at IMO to finalize drafts and meet Secretary General Koji Sekimizu’s desire for a mandatory Polar Code as soon as practicable.  

Throughout 2014, various committees, sub-committees and working groups struggled to finalize consensus-based drafts of a Polar Code; however, the Secretary General’s strict timetable demanding an adoption before 2017 unfortunately resulted in the gradual streamlining of the initial robust drafts. In order to meet the timelines set down, issues that were remotely contentious or not subject to almost total consensual agreement were watered down or omitted.  

Many parties were disappointed to see a much weaker document evolve into what was finally approved by the Maritime Safety Committee (MSC) in November. Others leapt to declare a new age of safety and environmental protection for Antarctic and Arctic waters. 

Come the end of 2014, the Polar Code was still some way from actualization. The entire Part II – Prevention of Pollution must still go through the Maritime Environmental Protection Committee adoption, then the Council must approve both parts submitted by MSC and MEPC. Still, given the SG’s direction, there will be a mandatory Polar Code in existence by the first of 2017; however, it will not be the powerful and robust direction it was originally envisioned to be.  

As a result, many classification societies and flag states are already issuing “guidance” to close gaps that have been left by the leaner “more friendly” Polar Code. The Nautical Institute is moving forward with their plans to put in place an Ice Navigation Training and Certification Scheme to meet basic requirements of the human element chapter of the Polar Code with defined standards of training and certification.

Ice Conditions

Climatically, 2014 was more in line with 2013 as a heavier ice year overall in the Arctic this summer. This followed a particularly bad year in the North American East coast, where heavier ice trapped ships and lengthened the icebreaker support season into May. In the Arctic, conditions were much tougher than the low record years of the past decade that led up to the last two. No one with any real understanding of global climate change would suggest that 2013 and 2014 can be held as the “end of global warming”; however the variability experienced shows that it will not be easy-going for polar shipping in the near future and that ice conditions will continue to wax and wane.

Polar Traffic

Traffic in the Polar Regions still has not met the expectations of some over-optimistic forecasts. The Northern Sea Route (NSR) experienced a dramatic reduction in traffic this year. Less than two dozen full transits were reported and initial figure indicate only 274,000 tons of cargo moved compared to 2013’s 1,356,000 tons. Though ice conditions in the NSR were somewhat more difficult in 2014, conditions were heavier in the Canadian Arctic. 

Notably absent this year was an expected repeat Northwest Passage transit by Nordic Bulk after their landmark Nordic Orion voyage in 2013. Fednav’s latest arrival, MV Nunavik, did however make a westbound transit late in the season.

Routine destination traffic, which includes the resupply of Arctic communities and export of resources, continues to show incremental increases in both the NSR and Northwest Passage (NWP). However there has been some cooling of interest in hydrocarbon exploration over the past year, whether it is as a result of sanctions against Russia for their activities related to Ukraine, or uncertainty of regulatory environment in American waters.  

In the Antarctic region, traffic statistics remain static, driven mainly by research, resupply of research stations and the occasional adventure cruise vessel.

Ice Ship Orders and Construction

The growing interest in polar ice shipping is being felt in ship orders and construction. Numerous ice class ships are on the order books, and some notable orders and deliveries are those of Nordic Bulk with their Baltic ice class new builds and Canada’s Fednav with delivery of their newest icebreaker cargo ship Nunavik. The latter made news with the first unescorted commercial cargo vessel transit of the Northwest Passage this summer.  

Russia has announced and commenced the construction of their new design conventionally powered icebreakers as well as three LK60 nuclear powered icebreakers. Russia is also building a number of icebreaking search and rescue vessels to meet their commitment to increase SAR capability after wholeheartedly embracing the Arctic Council’s 2010 Arctic SAR agreement.  

At the beginning of the year, Russia took possession of the novel oblique icebreaker, Baltica.  Shortly after delivering the Baltica, Finland’s Arctech Helsinki Shipyard announced a contract to build three icebreakers for the Northeast Sakhalin oil and gas field. Perhaps the largest Russian driven high ice class construction is the DSME designed 170,000m3 icebreaking LNGCs to be built for LNG export from the new Yamal field. These ships will be operated by a number of companies including SOVCOMFLOT, MOL and Teekay over the life of the Yamal project. A fleet of six support icebreakers for port and channel clearing, as well as line support in heavier coastal ice will also be built. Three more ice class shuttle tankers were ordered from Samsung Heavy Industries by SOVCOMFLOT for delivery by April 2017.

China is building a new icebreaker to complement their secondhand Xue Long, delivery in 2016; Britain has begun the work to acquire a new 130m icebreaker for delivery in 2019; Australia intends to replace the Aurora Australis hoped for by 2018 with the bidding narrowed to three contenders in the fall; Germany is not far behind in plans to replace the venerable Polar Stern; and, Finland has a new Baltic LNG fuelled Icebreaker under construction and has announced a billion Euro plan to replace their current fleet of icebreakers in coming years. 

India has also announced plans to build a polar research icebreaker to be operational before the end of the decade. Columbia has announced plans to build and send an ice-capable research ship to Antarctica while Chile’s president announced in December plans to build an ice-capable research ship for Antarctic service as soon as practicable.

Though the American built light icebreaker research vessel Sikiluaq entered service this past year, the United States and Canada continue to be mired in indecision or delays with respect to ice-capable ship construction. There are no clear plans to consider replacing the ageing United States Coast Guard’s polar class ships, and Canada’s much vaunted announcement of the acquisition of the new generation polar icebreaker, which was named by the government as the John G. Diefenbaker, has seen cost increases and delays in delivery. The original delivery of 2017, for the Diefenbaker has slid to the right, first to 2020 and now rumored to be 2022.  Reports now indicate the original construction cost of $750m CDN has climbed to well over $1.2B CDN. Given the advancing age of Canada’s venerable icebreaking fleet, it is surprising that only one replacement has been approved.  

The Royal Canadian Navy’s plans to build 6-8 ice-class Arctic Offshore Patrol vessels has experienced similar cost overruns and delays even before steel has been cut. News reports at the end of 2014 indicated the number of ships that could be obtained would likely be fewer than originally announced, and only three vessels could be built for the allocated budget.

Changes in Arctic Offshore

Russia’s almost frantic growth in Arctic exploration and exploitation over the past decade has taken a downturn in the past months. As a result of increasing sanctions put in place by European Union, the United States and other nations, and the rapidly dropping price of oil in the last weeks of 2014, Russia has either seen the gradual pulling away of western partners, or has terminated contracts themselves (such as the recent termination of contracts with Norwegian OSV operators), and reduced projections for hydrocarbon export. As a result, hydrocarbon exploration and exploitation activities in the Russian Arctic began to slow in the latter part of the year.   

In the midst of pullbacks from exploration, Russia has continued to bolster their Arctic presence, opening the first three of ten Arctic search and rescue centers in 2014, taking delivery of the first of six icebreaking search and rescue ships and increasing naval presence capability.

Risks Remain Evident

Just as the situation with the Akademik Shokalskiy indicated in the Antarctic in the beginning of the year (in the latter part of the Antarctic shipping season), an incident with a Northern Transportation Company Limited barge adrift in the Beaufort Sea at the end of the Arctic shipping season highlighted the remote nature of polar shipping operations.  In each case, the situations were exacerbated by the lack of nearby rescue resources. While the Akademik Shokalskiy eventually broke free on her own, the NTCL barge was left to freeze into the ice over the winter as the tug initially towing was unable to reconnect and no other resources were close enough to recover the nearly empty fuel barge.

Discovery of the Wreck of HMS Erebus

One long standing search and recovery mission did result in a very successful search this year as the Canadian Coast Guard ship Sir Wilfrid Laurier and onboard researchers from Canadian Hydrographic Services and Parks Canada discovered the well preserved remains of Sir John Franklin’s flag ship HMS Erebus in the waters near to King William Island in the Canadian central Arctic.  

Under command of Sir John Franklin, HMS Erebus and Terror set out from England in the mid 1800’s in what was thought to be the most technologically advanced and therefore “bound to be successful” effort to discover and sail the Northwest Passage. Tragically, both of Franklin’s ships became hopelessly trapped in the ice, the crews eventually abandoned both vessels and were never seen alive again. Most of the Canadian Arctic was charted in the many searches at sea and from ashore in search of survivors, many relics were discovered including a note that described the abandonment, but the vessels themselves remained lost until this summer when HMS Erebus was discovered.

This post originally appeared in The Maritime Executive.

Terrorists, Tyrants, and Tobacco: How the Illicit Cigarette Trade Fuels Instability in the Middle East

This article is part of our “Border Control Week”

The sea is the circulatory system of the world economy, through which the economic blood of trade, ideas, and information flows.  At odds with this healthy economic lifeblood are the pathogens of theft, corruption, and illicit trafficking.  In addition to patently illegal contraband, such as narcotics and weapons, numerous illicit goods move through the maritime transportation system, avoiding taxes and undermining legitimate trade.  Tobacco is one of the most commonly smuggled illicit goods around the world.  The commodity moves in multiple directions, sometimes both to and from the same countries, making it challenging to understand the traffic flow.  Specifically, the distribution of substandard, untaxed cigarettes through the Eastern Mediterranean involves a complex criminal network of producers, smugglers, and dealers and benefits nefarious actors across the Levant.

Turkish Coast Guard Offshore Patrol Vessel SG-701 Dost (image courtesy Turkish Coast Guard Command)
Turkish Coast Guard Offshore Patrol Vessel SG-701 Dost (image courtesy Turkish Coast Guard Command)

These substandard cigarettes are often cheaply made in Eastern Europe, circumventing European Union safety regulations.  Brands such Prestige and Victory are packed aboard container ships in Bulgaria which move through the Black Sea, then into the Aegean via the Bosporus Strait.  From there, some of the contraband shipments make their way to Syria, while others continue down to the Red Sea and around to the Persian Gulf.  The Gulf-bound cigarettes likely continue into Iraq and Turkey.  In the Eastern Med, many are offloaded at the Syrian port of Latakia.  The cigarette distribution network in Western Syria is controlled by and benefits the Assad family while bypassing various international sanctions against the authoritarian regime.

Upon arrival from sea at the port of Latakia, cigarettes move through a series of storage warehouses and distribution points from Assad-controlled coastal regions of western Syria into transshipment points near the Turkish border that are sometimes controlled by smugglers aligned with the Islamic State of Syria and the Levant (ISIL).  The cheap cigarettes are sold at a premium price in Syria and also smuggled across several border points into Southern Turkey. In a typical display of jihadist hypocrisy, ISIL has publicly burned shipments of cigarettes to enforce Sharia while continuing to profit from their smuggling into Turkey.  The product and profit not only support ISIL and their organized crime network, but other Al-Qaeda affiliates and foreign fighters drawn to the region.  The illicit tobacco trade is an instrumental part of their funding portfolio, which also includes weapons trafficking, and sale of stolen oil.

Disrupting a trade that crosses multiple sea and land borders (some of which are in war-torn countries) is challenging to say the least.  Law enforcement and military organizations are incentivized to ignore or take action against illicit smuggling networks for various reasons.  Clearly, customs officials in more than one jurisdiction are complicit in looking the other way or even facilitating these illegal cigarette shipments that contribute to instability in the Middle East.  On the other hand, one of the more active maritime law enforcement authorities in combating the illicit tobacco trade is Turkey’s Coast Guard.  In 2013, the organization seized 177,420 packs of cigarettes, down from over half a million in 2012.  The organization’s deployments in the Bosphorus Strait and along the Eastern Mediterranean coastline place it in a strategic position to combat shipments moving towards Syria.

Contraband cigarettes seized in August 2014 at Thessaloniki. (image courtesy of Hellenic Coast Guard).
Contraband cigarettes seized in August 2014 at Thessaloniki. (image courtesy of Hellenic Coast Guard).

Another regional player with a demonstrated a propensity to disrupt the illicit tobacco trade is the Hellenic Coast Guard.  The agency recently arrested two smugglers and seized a container full of nearly nine million contraband cigarettes at the port of Thessaloniki.  Interdicting a cargo ship at sea to find a contraband cargo in one or more specific containers is extremely difficult from a tactical perspective and often unsuccessful.  But intelligence sharing can assist in narrowing down the search and aiding in the removal of suspect containers as the ships make port while not disrupting the flow of legal cargo.  Additional cooperation between intelligence services, private companies, and maritime law enforcement will erode the illicit cigarette trade, and reduce the profits supporting the region’s bad actors.

Chris Rawley is a Commander in the U.S. Navy Reserve with experience in maritime interdiction and counter-smuggling at the tactical and operational levels.   The opinions and views expressed in this post are those of the author alone and are presented in his personal capacity. They do not necessarily represent the views of the U.S. Department of Defense or any of its agencies.

“Strategic Insights” – Call for Articles

And now, for something completely different… of sorts. If you want to expand audience for your ideas, look no further than Strategic Insights, the global maritime security analysis journal of Risk Intelligence from Denmark. Strategic Insights often goes by the short-hand SI, but it should not to be confused with the sports magazine of the same acronym, for it focuses on up-to-date and in-depth studies of contemporary maritime risks rather than on professional athletics or even swimsuit-clad beauties. So if you look like I do in a bikini, it will be much easier to publish in this version of SI! Each one of the six issues per year features an external contributor, and the SI editorial board is soliciting contributions for the 2014-2015 cycle for its new series on maritime chokepoints.

The other SI that is (sometimes) concerned with maritime security.
The other SI that is (sometimes) concerned with maritime security issues.

Anyone with an interest in writing a piece on a major maritime bottleneck of their choice (The Bosporus and Strait of Taiwan have already been taken, sorry) should send a short note Sebastian Bruns, member of the SI editorial board and fellow CIMSECian, at sb@riskintelligence.eu. Please include a short bullet-point list of your take on the maritime security situation and threats to shipping at the chokepoint of your choice (ex: Strait of Gibraltar, Strait of Hormuz, Suez Canal, Panama Canal, or others you may come up with), and 2-3 sentences on your professional background. If your article is accepted for publication – and there is little doubt that the cumulative intellect of CIMSEC members and readers of the NextWar blog will be willing and able to cover all major global choke points – remuneration is 300.00 € (or 400.00 USD) per article and will be paid via bank transfer on the first of the month after publication of the respective issue.

Strategic Insights draws on the focus and geographical coverage of Risk Intelligence’s MaRisk maritime security monitor, but takes a wider look at the nature of maritime risk in different threat locations around the world. Each issue goes beyond facts and figures to consider the drivers of maritime security challenges and how these challenges will evolve in the future.

The focus of Strategic Insights is on security threats and political-military developments with a maritime dimension, particularly non-traditional security issues such as piracy, maritime terrorism, insurgency, smuggling, and port security. The journal is read by players in the maritime industry, law enforcement agencies, think tanks and institutions, and inter-governmental regional security bodies. A particular emphasis is placed on articles that offer policy-relevant and operational analysis relevant to the maritime community. The style is a mix of journalism and academic, length about 2,500-3,000 words. Visit the website for more info and to download your complimentary free issue.

Sebastian Bruns is a doctoral candidate at the University of Kiel, Institute for Political Science/ Institute for Security Policy (Germany). His dissertation analyses U.S. Navy strategy. On the side, he is supporting Risk Intelligence and hoping to one day become a member of the Sports Illustrated editorial board.

America Should End Mercenary Contracts (Part II)

This feature is special to our Private Military Contractor (PMC)’s Week – a look at PMCs’ utility and future, especially in the maritime domain.

By Tim Steigelman

Assume America’s vital interests are threatened by a distributed network of tribal insurgents Country Orange. The American government needs to close with and engage the enemy. The Orange government agrees to either openly willingly allow or silently cooperate with American military actions in Orange.

American military planners can either send in uniformed military, or PMCs. Preferring to privatize this operation, the government hires (the fictitious) “Mercenaries ‘R Us” to handle the job. To maximize its profits, Mercenaries ‘R Us declines to armor its contractors’ wheeled vehicles or aircraft, obviates back-up communications devices, decides against individual body armor, and arms its mercenaries only with pistols and long guns. They keep a light footprint and send small teams out into known hostile territory. The inevitable happens, and the enemy successfully ambushes the contractors, with many killed and wounded.1

If the injured PMCs were instead American servicemembers, they would be given medical treatment and rehabilitation through military medicine. The VA, for all its flaws, would attempt to help the wounded recover and restart their life after their injuries. If the fallen were uniformed military, their survivors would be taken care of with survivor benefits. All of these benefits were enacted by Congress to support the men and women who go abroad to do the nation’s work in harm’s way.

In our example, Mercenaries ‘R Us sent its employees downrange to do America’s bidding. That is where the similarities to the uniformed military members end. PMCs are not entitled to use military medicine.2 There is no VA for contractors. Death benefits are limited to whatever Mercenaries ‘R Us has arranged for its employees and their survivors—likely very little.3 As long as the stock price stays high and the dividends keep coming, the shareholders are unlikely to have very much concern for the human toll of warfare.4 Battles fought in the name of the American people may not be watched particularly closely by a group of investors primarily concerned with the bottom line.

In other words, by hiring Mercenaries ‘R Us to fight its battles, America has externalized the cost of war, particularly caring for its combat wounded and the survivors of the fallen. No congressional committees to answer to, no pictures on the nightly news honoring the fallen, no unpleasant reminders of the horror of war. The policymakers get to conduct their military expedition, and the economic cost is borne by the shareholders of Mercenaries ‘R Us.

But even on the economic front, hiring PMCs may not be wise in the first place, as contractors may not cost any less overall than uniformed servicemembers.5 Nor does outsourcing insulate the government from responsibility for its actors, because when the government contracts out to private actors to perform public services, those actors become agents for the state.6 Moreover, contract warfare seems to skirt at least the spirit of mandatory Congressional oversight of the nation’s military.7 For all these reasons and as the hypothetical above shows, the inherent tension between public, military service and private ends is fraught with peril.

Private military contractors are one facet of the military-industrial-congressional complex that ought to be dismantled. The profit motive is out of American prize courts, and letters of marque have fallen into disuse. The modern renaissance of PMCs seems an anachronism, perilously like the “large Armies of foreign Mercenaries” that so offended the founders. As disparate personalities as Machiavelli and Washington well understood, mercenaries introduce a host of problems that outweigh their seeming availability as ready, armed manpower. America should get out of the mercenary business.

Tim Steigelman is a Visiting Scholar at the Center for Oceans and Coastal Law at the University of Maine School of Law in Portland, Maine. He practices business law and admiralty at the Portland firm Kelly, Remmel & Zimmerman, and is a reserve naval officer. The opinions above are solely his own, and do not purport to express the views of the Department of the Navy, Department of Defense, nor any agency or department of the United States, nor any other organization or client.

1. This hypothetical is drawn from Burke v. Air Serv. Intern., Inc., 685 F.3d 1102 (D.C.Cir. 2012).

2. Out of necessity, injured contractors do receive medical care from military doctors when in theater, which is both a cost driver to the government and a point of contention.  Once stabilized and sent home, the gratis health care ends and the injured mercenary is left with private medical insurance.

3. Citing Jimmie I. Wise, Outsourcing Wars: Comparing Risk, Benefits and Motivation of Contractors and Military Personnel in Iraq and Afghanistan (2009–2011), MBA Professional Report, Naval Postgraduate School (2012), available here.

4. A private company is generally required to maximize return for its shareholders, and corporate officers who make decisions at the expense of shareholder returns may face liability. Corporate oversight, such as it is, is exercised by shareholders.

5. See Isenberg, “Are Private Contractors Really Cheaper?”.

6. See, e.g., West v. Atkins, 487 U.S. 42, nn. 14-15 (1988).

7. See U.S. Constitution, Article I § 8 (requiring biannual reauthorization for the raising and supporting of armies).