February 8, 2019

The Motorship
Leader briefing

Fednav is Canada's largest ocean-going dry bulk shipowning and chartering group.
In its 75-year history, Fednav has weathered many previous market and regulatory changes.

Although all shipowners and operators are exposed to the upcoming raft of environmental regulations, such as the IMO's 2020 sulphur cap, ballast water management regulations, or future developments such as EEDI, Fednav is also exposed to the risks and opportunities arising from the Polar Code and the likely growth of market opportunities in the Canadian Arctic.

Fednav's Martin Krafft, Vice-President, Shipowning and Technical Services, explained how Fednav has developed close partnerships with a number of established partners, and how these partnerships are based on a shared commitment to excellence.

As Fednav faces changing market opportunities, enforced higher ship standards, and tighter environmental regulations more broadly, Martin Krafft explained how Fednav is leveraging its strong relationships with partners ranging from ship designers to third-party ship operators to develop technical solutions to the questions confronting Fednav.

This approach can best be understood by examining how Fednav has contributed to the development of its Third Generation Lakers, constructed by Fednav's long-standing Japanese shipyard partner, Oshima Shipbuilding.

A key component of Fednav's portfolio is its fleet of Laker bulk carriers - bulkers optimised for international trade via the St Lawrence Seaway and Great Lakes system. Fednav's fleet of Lakes-suitable bulk carriers together with its Arctic shipping division greatly determine Fednav's heritage and thrive for excellence and the company will remain a leader in the conveyance of bulk commodities directly into and from the North American heartland.

The composition of dry bulk supply and demand in the North American heartland is changing: iron ore shipments accounted for some 50.5 million tonnes out of 143 million tonnes of freight carried in 2017, with metallurgical and steam coal accounting for a further 17.3 million tonnes. Structural changes in the steel market are seeing steel mill production capacity drift away from the U.S. Midwest towards the faster growing regional markets in the southern U.S.

Martin Krafft noted that Fednav has taken steps to future-proof its business, drawing up an analysis of bulk and break-bulk cargo lifts, including ports, parcelling and cargo specific optimization.

“In cooperation with our clients and stakeholders, we run projections of future cargo flows, development of current trade routes and new market opportunities opening,” Krafft noted.

These insights directly feed into Fednav's vessel development programme. The Canadian company has developed close cooperation with ship designers and component suppliers to make the most of Fednav's unparalleled expertise operating in the Great Lakes.

“Our ongoing goal is to build the most environmentally efficient vessel while at the same time optimizing the cargo lift for our clients and our earning potential. While that in itself isn't groundbreaking, partnering with other industry leaders, choosing the right technologies and implementing sophisticated processes are essential,” Krafft noted.

“In order to deliver a higher standard, it is necessary to partner with the best,” Krafft said, noting that developing relationships based on a shared commitment to excellence was a common thread running through many of Fednav's relationships.

Fednav has developed a close relationship with Oshima Shipyard in Japan, which has become the company's preferred supplier of Lakes-suitable vessels. The shipyard is a great Japanese shipyard that builds highly sophisticated ships, Martin Krafft added.

“We used the outputs from the engineering and economic analysis to determine the optimal hull design and cargo hold layout. For the next generation program, we have looked at principal ship dimension optimization, cargo hold space optimization, analysis of cargo gear for increased commercial and environmental efficiency, and application of sensible hull coatings.”

Fednav prides itself on its direct feedback loop, Martin Krafft noted. The nature of the input has evolved over the years, but Fednav's in-house naval architects, marine engineers, and mariners work closely with our ship manager's newbuilding department and the design team at the shipyard to devise the vessels with our highly specific commercial needs in mind.

One area where ship designers achieved shipbuilding and operating cost efficiencies was by modelling the stiffening effect of transverse bulkheads within one web frame spacing, allowing the designer to lighten the vessel's steel structure.

Fednav's Laker vessels feature flipper fins, propeller boss cap fins, pre-swirl stators and rudder bulbs. The Third Generation Laker vessels have also seen advances in bows and hull forms.

“Together with our partners at the shipyards, we put great emphasis on the optimization of the entire propulsion configuration and the aquadynamics,” Martin Krafft said. Fednav is continuing to identify new areas for optimization for newbuilds and the existing fleet, with recent examples including cleanbilge systems and air seals.

The close interaction has borne fruit, with progressive improvements in fuel efficiency and environment performance. Martin Krafft proudly noted that the Third Generation of Lakers emit 25% less greenhouse gas emissions compared with similar vessels built less than 15 years ago, while NOx emissions have fallen by over 15% over the same period. The Third Generation

Lakers receive best-in-class ratings from shippingefficiency.org.

However, Fednav has set itself challenging targets, and further technological evolution will be needed for the company to meet its goal of reducing greenhouse gas emissions by 1% per tonne/mile per annum over a 10-year period.

Fednav's commitment to high environmental standards predates recent regulatory pressures, reflecting the company's commitment to high standards. Taking ballast water treatment systems as an example, Fednav has been testing BWTS units since 2001, well before the regulatory requirements entered into force. Fednav was the first shipping company operating in the Great Lakes to install BWTS systems on newbuilds and to utilize them during every ballasting operation.

While Fednav's recent significant projects to deploy and utilize ballast water treatments systems with Optimarin have been widely reported, the company has also recently undertaken steps to replace inefficient oil-water separator technologies with clean bilge systems and to introduce sterntube air seals to completely avoid oil/water interfaces, although the company has been using biodegradable oil for use at all oil/water interfaces, such as bow thrusters, for many years across its fleet.

Other environmentally sustainable programmes include eliminating plastic bottles on board; LED lights to reduce electrical consumption and thermal energy recovery.

The company has developed a number of policies to prevent waste pollution. These include the installation of dedicated hold cleaning wash water tanks, the retrofitting of grey water tanks for all vessels, the introduction of garbage compactors and food waste deep freezers, and the strict enforcement of a zero-tolerance policy for the illegal disposal of oil at sea. Vessels owned or employed by Fednav do not use incinerators while in ports, harbours, or estuaries.

These commitments are consistent with the company's values - delivering a product at a higher standard - but are also the minimum requirement for operating in the unspoilt environments of the Canadian Arctic and the Great Lakes-St Lawrence Seaway System.

“Fednav has successfully been operating in the Canadian Arctic for over 60 years, one of the world's most pristine and harshest environments, without any incidents. The company continues to collaborate with environmental NGOs to further protect this most fragile ecosystem and its communities. Environmental protection isn't just a passing fling to Fednav, it is in our DNA.”

Source: The Motorship (https://issuu.com/mercatormedia/docs/motorship_feb_2019_pt/1?ff) page 8

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