Oil Storage and Transportation: Minimizing The Risks

oil transportation and storageOil Storage and Transportation: Minimizing The Risks

Crude oil can be dangerous and capable of doing a great deal of damage in a short amount of time. Preventing serious accidents and hazardous situations should always be a priority. Good design, regular maintenance, and proper training all come together to create safe, reliable transportation and industrial storage solutions.

Safer by Design

In designing industrial storage solutions, you are well served by remembering the basics. In order to burn, fire requires three things: heat, a combustible material, and oxygen. Oxygen is readily available in the air, and the oil itself, along with the fumes it gives off, is a combustible material. This combination makes pumping stations a prime candidate for an incident.

Pumping stations should be kept as cool as possible and pumping should only occur when truck engines are turned off. Smoking and anything that involves combustion must be prohibited from the area. Pumping stations must also be well ventilated so escaping gasses do not have a chance to build up.

Storage tanks must be properly grounded to avoid any electrical sparks, and they should be equipped with gas detection systems so operators can be alerted to dangerous situations. It should go without saying that all storage units should be built according to code.

Maintaining Safe Conditions

Degradation of storage and pumping units can lead to dangerous conditions and preventable incidents. Therefore, storage facilities require a stringent routine of inspection and maintenance. Trained inspectors should check for gas leaks on a daily basis, and all workers must be required to wear rubber-soled shoes. Smoking, cell phones, and anything else that could cause a spark must be prohibited from the area.

Maintenance tasks should never be completed with battery operated tools, as they are more likely to spark than hard-wired tools. In addition, all tools and extension cords should be in good repair as both are potential sources of sparks that could result in fire.

Training for Prevention

Industrial storage solutions are inherently dangerous. There is no safety procedure or any piece of safety equipment that is going to be effective without proper training. The education begins with the storage facilities:

  • Operation supervisors must know the purpose of each storage unit, and must use each tool and device correctly.
  • Inspectors must perform thorough inspections rather than simply report gas accumulation figures.
  • Inspectors should understand the proper use of each storage tank, where it can fail, what the first signs of failure are, and how to stop any degradation before it reaches the point of failure.

Training should be an ongoing activity, not a one-time event. Safety procedures should be reviewed with all employees on a regular basis, and all training materials should be frequently updated. Emergency procedures should be practiced and memorized by all workers so there is never any confusion or delay when incidents do occur.

Keystone XL Pipeline Myths and Facts

keystone pipeline, keystone XL7 Myths About Keystone XL, And The Real Story

In the commotion surrounding the Keystone XL pipeline project, from environmental concerns to economic claims, it’s hard to pick out the real story. Here, we address seven rumours, from the frivolous to the serious, to try to uncover the truth.

Myth: Keystone XL Exports Internationally 

This myth is based on pure misinformation, but somehow it is still shared. Oddly, rumours persist that the pipeline would export oil to China, but that’s not in the plans. Keystone XL brings Canadian oil to refineries in the Gulf Coast. These refineries are locked in to long-term contracts to receive oil from Keystone XL, so the reality is that the oil will not be exported internationally.

Myth: Oil Transported by Keystone XL Will Have an Elevated Spillage Risk

This myth stems from the idea that synthetic crude and dilbit, which will be transported by the Keystone XL pipeline need to be heated or are more likely to corrode pipes, leading to spills.

In fact, the pipeline will be built to much higher safety standards than other pipelines. And it’s untrue that the oil would be more corrosive than standard crude—no heating, no major compositional changes.

Myth: Keystone XL Would Increase The Price At The Pump

This myth is mostly a misunderstanding of how oil prices actually work. Gasoline prices are determined by international, not local markets. We saw the result of that when OPEC decided to keep their production levels high and prices plummeted. It’s incredibly rare for one source to determine prices.

That said, Keystone XL has a comparable production capacity to half the current U.S. imports from the Persian Gulf. This stable source of oil could actually lower the price at the pump by making refineries less endangered by global disruptions.

Myth: Exploring the Canadian Oil Sands Will Result in Greater Greenhouse Gas Emissions

In reality, crude oil from the oil sands has very similar well-to-retail pump greenhouse gas emissions to other common sources in the U.S., such as Venezuelan crude. Furthermore, producers aren’t leaving greenhouse gas emissions from the oil sands to chance. Rather, they are actively working to improve the environmental impact of development.

Myth: Stopping Keystone Would Stop Canadian Tar Sands Exploration

This claim is pretty unlikely. The Canadian oil sands production will have a market, whether or not Americans are purchasing from it. It’s much more likely that if Keystone XL wasn’t approved, Canadian producers would just export their oil elsewhere, likely to Asian markets. In that scenario, it’s not like North Americans would stop needing oil, and would likely continue to import from distant Middle Eastern sources. Of course, all of that shipping takes energy, which means it requires oil. From that angle, stopping Keystone could actually increase overall greenhouse gas emissions as all of this oil moves around the world.

Additionally, the government doesn’t predict any change to oil sands production whether the pipeline goes ahead or not.

Myth: Low Oil Prices Have Made Keystone XL Irrelevant

This is far from the truth. Keystone XL pipeline is a part of an infrastructure to help North Americans become more oil self-sufficient, by connecting refineries and sources safely across the continent. With elevated safety measures and fewer shipping costs involved, Keystone XL remains as relevant as ever.

Myth: American Workers Don’t Benefit From the Keystone XL Pipeline

The American Petroleum Institute estimates that Keystone will create as many as 343,000 U.S. jobs in four years. Even conservative estimates from the government forecasts the creation of 42,000 jobs during the construction phase alone. Many of those will be high-wage manufacturing and construction jobs, which help families live comfortably.

In the long term, things look even better. The Canadian Energy Research Institute (CERI) estimates that oil sands activity will increase the total U.S. GDP by $210 billion over the next twenty years. Jobs look good in the long view as well, as CERI predicts 600,000 jobs could be supported by the pipeline in the same period.

Keystone Pipeline Delay Not Affecting Canadian Oil Producers

Seamless background of water pipeline

keystone pipeline delay

Keystone Pipeline Delay Not Affecting Canadian Oil Producers

“Keystone is kind of old news,” said Sandy Fielden, Director of Energy Analytics at Austin, Texas-based consulting company RBN Energy. “Producers have moved on and are looking for new capacity from other pipelines.” That’s a quote worth considering. With Keystone XL still years away from even potential completion, it might seem that hopes for Canadian oil exports are caught in limbo. However, nothing could be further from the truth.

Despite six years of delays on the Keystone XL pipeline — which would mimic the existing pipeline between Hardisty, Alberta and Steele City, Nebraska in order to bring bitumen from Alberta to Gulf Coast refineries efficiently — Canadian crude shipments are still projected to climb to more than 400,000 barrels a day next year. That figure is nearly double the current Canadian export rate.

Of course, Keystone’s capacity would provide an even greater increase to the present export rate, but the expanded pipeline would only be a strong addition to an already existing system that is operating successfully.

In fact, Canadian crude exports to Gulf refineries have gone up 83 per cent over the past four years, all while the Keystone XL pipeline has been waiting for the Obama administration’s approval in order to go ahead.

Pipeline Workarounds Abound

Canadian exports to the U.S. have never been higher than they have been in the past few weeks, and the slow progress on the approval of the Keystone XL is not proving to be a stopping block for the industry.

Other large pipelines have become strong alternative options, including the Trans Mountain expansion, Enbridge’s Northern Gateway and TransCanada’s EnergyEast — sometimes touted as Canada’s alternative to the Keystone XL. Additionally, some old Midwest pipelines have even been reversed to bring crude oil to Gulf refineries, rather than bringing refined oil to consumers as they used to.

Canadian oil is being shipped by rail, with increased efficiency and safety as time goes on. In the first half of 2014, Canada was sending 54,000 barrels a day to the Gulf by rail. The main disadvantage to using the rail system, besides it being a slower way to get crude oil to the market, is that there is no systematic oversight or design strategy to guide its development. Keystone would provide a unified method for exporting oil, and providing protection for producers and consumers alike.

The Future of Keystone XL

The American Senate Democrats may have blocked a move to start construction on Keystone XL in mid November, but the pipeline is still in the plans.

When the bill comes up again in the new year, under a Republican-controlled Senate, there is a good chance the bill will pass. However, there remains the chance that President Obama might refuse the pipeline, as he did in 2012.

Even with the President’s historical opposition to the pipeline and other transport measures in place, Canadian oil producers haven’t given up on the project. According to a spokesperson from TransCanada, who owns the potential project, Keystone XL would still be the least expensive way to get Canadian oil down to the Gulf. TransCanada’s clients have maintained their contracts for the use of the pipeline, and the company remains devoted to its plan.

So while Canadian oil transport hasn’t been entirely limited by the long delays on the pipeline, it still remains a much-anticipated project.

Canada’s Marine Shore Power Technology Program

Canada's Marine Shore Power Technology ProgramCanada’s Marine Shore Power Technology Program

The shore power technology program for ports in Canada, also known as marine shore power, is a $27.2 million dollar program. It allows marine vessels to plug into a local electrical grid when their vessels are docked at a port. Instead of having ships idling and releasing emissions, they will use the port’s electricity for power. The ships, who dock at ports with shore power, will not burn diesel fuel. All of the power needed on the vessel will come from the electrical grid that it is plugged into.

First announced in January of 2012, the goal was to improve Canadian air quality by reducing emissions around marine ports. The Canadian government has committed to reducing emissions, air pollution and greenhouse gases by 17% before the year 2020. Transportation is the largest contributor to emissions, so having electrical power at port docks will help to reach this goal.

Benefits of Shore Power Technology

The Shore Power Technology for Ports program will increase competition in Canadian ports. It will also create new jobs across Canada and present new opportunities for expansion in Canadian tourism. The program will attract new businesses to Canadian ports, because it will significantly reduce diesel fuel costs to ship operators.

Halifax Port Authority Signs Up

In January of 2013, the Halifax Port Authority announced that it was undergoing construction for a shore power system. They are proud to announce that once the system is ready, ships will be able to dock and plug in to the electrical power grid. This will allow the ships to then shut down their engines. This has many benefits for Nova Scotia. Those benefits will include a reduction in emissions, which will help the environment and air quality for the surrounding residents. Since ports are usually close to cities, this particular benefit is important. Another great value for the province will be the increase in economic prosperity.

Transport Canada’s Marine Shore Power Program ran from 2007 to 2012. The Transport Canada funded $2 million dollars to Port Metro Vancouver, so they could effectively create shore power for cruise ships. Additionally, Transport Canada funded $1.6 million dollars for shore power to the Port Authority of Prince Rupert, so container ships could dock and plug into their electrical power grid.

Applying for Funding

The Canadian government made an official judgment for proposals on May 4, 2012. Ports may continue to apply for funding until December 31, 2015. In order to apply, the port must submit a project proposal and a funding application. Eligible participants have to be Canadian Port Authorities and the companies that own or operate marine ports or terminals in Canada.

The shore power program for Canada will reap many benefits, especially with reducing emissions from ships idling and burning diesel fuel. This may also be a great step toward reducing the use of fossil fuels for energy.

Personal Safety in the Shipping Industry

personal safety in the shipping industryPersonal Safety in the Shipping Industry

No one working in the shipping industry ever wants to hear the cry of, “Man overboard!” Thankfully, the advances in technology in personal safety in the shipping industry have improved the chances of rescue, should an accident occur. These developments have happened because of the need of maritime operators to meet certain safety standards for their crews and ships. Leading the charge is the Automatic Identification System (AIS). Every ship would benefit by being equipped with this type of transmission beacon.

When accessed, the AIS can provide a ship’s identity and global position. This can help a great deal in emergencies. Now, shipboard AIS technology has been pared down to a personal transmitter. The AIS Survivor Recovery System will revolutionize the way rescues are performed.

One of the first such transmitters put into wide use is the SafeLink R10 AIS SRS. The design of these units allows them to fit into a pocket or in a special holder on a lifejacket. For especially hazardous zones they can even be sewn into the protective gear worn by crewmembers. Additionally, SafeLinks can be retrofitted into a ship’s life rafts.

When activated, these devices transmit alerts and GPS signals to any receiver in a four-mile radius. Suppose a crewmember does fall overboard. The ship will have the AIS receiver up and running, which can pinpoint the location of their comrade in no time. Thanks to the 60-second update intervals, the location of the device will never be in doubt. Another type of personal AIS manufactured by Ocean Safety has a flashing LED light that helps with nighttime rescues. It also will transmit for 24 hours straight.

The use of personal AIS devices are part of the new safety regulations handed down by the International Maritime Organization (IMO). The regulations passed in 2000 specify that all ships of 300 gross tonnages or more, must be equipped with an AIS system for ship-to-ship communication. That is also true of any cruise liner or cargo ship with 500 gross tonnages.

Beyond the professional shipping industry, personal AIS devices are also gaining in popularity with pleasure craft owners and charter fishermen. This has lead to a significant spike in the sales of these devices anywhere there is a marina nearby. Ocean Safety, the makers of the SafeLink, report that there are increased corporate orders for AIS SRS. Apparently, these units are replacing the EPIRB Personal Locator Beacons, whose sales have flat-lined.

To prove the merits of their device, Ocean Safety reps took 25 members of the Icelandic Fishing and Rescue Departments on a “rescue mission.” This involved a brave volunteer diving into the icy waters of Reykjavik Habour. He was wearing a survival suit and lifejacket equipped with the AIS. After the moment the lifejacket was deployed, the AIS began transmitting data within five seconds. The volunteer was plucked from the waters with pinpoint accuracy.

The emergency response fleet Svitzer UK has implemented the use of the SafeLink across all 100 of its vessels. With a weight of 120 g and measurements of 27 x 47 x 124mm, users hardly notice they are carrying the device until they need it the most.

Canadian Shipping: Connecting Canada to the Global Economy

Connecting Canada to the Global EconomyCanadian Shipping: Connecting Canada to the Global Economy

Logistic and transport sectors have played critical roles in strengthening Canada’s economy through global trade and commerce.  The Canadian government realizes the importance of an integrated logistics industry for economic growth and is taking a number of measures to ensure transportation is secured and monitored.

Asian countries, such as India and China, are urbanizing and growing, which further emphasizes the importance of an integrated transport network.  The growing population, within the Asian business hubs, makes them one of the biggest consumer markets in the world. Every 18 months, India sees an increase in their population that is equivalent to the total population of Canada. To make a successful transition from a moderate-growing economy to a fast-growing economy, Canada needs to strengthen their shipping and port infrastructure to meet the demands. Additionally, Canada needs to be an active part of the global economy and fulfill the requirements of forging long distance trade links.

Canada’s transportation industry has always played a vital role in supporting their country’s economy. It has made the country a part of the global financial transformation. The sector has also served the purpose of shielding Canada’s economy from the aftermath of the global financial crisis. Due to the location of Canada and a well-developed logistic industry, every country is connected to Canada via roads, marine routes or aerial gateways. This is one of the primary reasons that Canada is considered to be one of the biggest hubs for foreign investors.

Another area of strength for Canadian ports, especially from an international perspective, is how the federal and provincial governments have come together to invest in the Asia-Pacific Gateway. About $9 billion dollars of investment has being poured into the BC ports alone. Comparatively, that is far more than the $6 billion dollar expansion of the Panama Canal. The Canadian government is heavily involved in the logistics’ and ports’ infrastructure. This is a great advantage, since Canada is a trading nation and their ports are critical to the nation’s success. The ports are able to plan for long-term needs in a structured way, which helps both the provinces and the nation. As an example, the ports of the Lower Mainland of BC provide at least $6 million dollars per year in taxes to municipalities, which helps fund municipal services.

There are three main gateways for Canada:

  • Asia-Pacific: Connects Canada to the Asian region
  • Atlantic gateway: Connects Canada to Asia and North America
  • Continental Gateway: The multimodal gateway connects Canada to the United States, Europe and Asia through a wide spread network of rails, airports and marine ports

Dividing the entire logistic sector in three major gateways, helps the government supervise all the operations and ensure secure transportation of goods. Moreover, there are a number of sub-gateways emerging from these gateways, which helps to avoid the problem of traffic congestion. Due to the logistic industry of Canada, Canada headquarters 75% of the world’s mining companies and holds significant shares in the growing consumer markets of India and China.

Benefits of Arctic Shipping

benefits of arctic shippingBenefits of Arctic Shipping

The Nordic Orion is a Danish owned bulk carrier. In 2013, they were the first bulk carrier to travel through the Northwest Passage. However, the large vessel relied on a durable icebreaker, which was the Canadian Coast Guard’s Louis St. Laurent. The Louis St. Laurent escorted the shipping vessel through the Arctic by making a path through the ice. Canada is currently undergoing a large debate surrounding the potential of increasing arctic shipping. Some cargo shippers are planning on increasing their trips through the Northwest Passage.

Arctic Shipping Study Findings

This debate stems from an article that was published in the journal Climate Change. Researchers, from Environment Canada and the University of Ottawa, studied the patterns of arctic shipping from 1990 to 2012. Their analysis concluded that there was an increase in shipping during the summer seasons for the past twenty years. Additionally, this increase boomed in the past 10 years.

Arctic Shipping Increase Due to Tourism

The main reason for the increases in arctic shipping is not due to resource development or major cargo transports, but from small increases in community resupply vessels and fishing shipments. The result of this study shows that the boom in arctic shipping is not necessarily from climate change, but is a result from an increase in Canadian tourism. More people are wanting to experience Canada’s landscapes and cultures, which is great news for Canada.

Increase Due to Climate Change

Some of the increase may be due to climate change. The group’s study found that the shipping season is getting increasingly longer, which includes transporting cargo. There were findings of considerable increases of shipping during the months of June and November. Those are the same months that show the biggest decrease in sea ice. The study that was conducted by the University of Ottawa showed some shipping increase is due to climate change, yet not as much as expected from them or from various climate change groups.

Canada Can Benefit from Arctic Shipping

People visiting Canada, construction, communities resupply and research exploration activities are the main reasons for the boom in arctic shipping. Also, an increase in cargo tankers, oil shipping and transportation of goods is expected. The increase will not only be from Canadian shippers, but also from international shippers from Russia and those heading to the EU.

There is some debate about the Northwest Passage being a Canadian owned or internationally owned waterway. Either way, it looks like Canada owns it right now. Plus, it creates career opportunities for Canadians. People are needed to police the marine corridors for ships that seem to unintentionally find their way into the Northwest Passage, instead of staying within their own corridor. Also, new icebreakers will need to be built to keep up with the increasing demand. The marine corridors will need to be maintained for safety reasons. This will be a positive investment for Canada, which is already generating a large variety of benefits.

Canada Marine Port Divestiture

canada marine port divestitureStrengthening the Canadian Marine Ports Network

The country’s location is an asset for the Canadian marine ports. Canada has some of the most important gateways for bridging the gaps between consumer markets all around the world. The Canadian government is taking a number of measures to strengthen the marine port system of Canada. They are divesting the domestic and regional ports, so they can be easily operated by local companies.

Transport Canada is the central authority that is in charge of divesting and monitoring the operations of marine posts. The department has been playing an active role in transferring and divesting regional and local ports owned by the country. Early in 2014, Transport Canada proposed a plan (Economic Action Plan) to divest, maintain and monitor federally administered marine ports. The plan proposes to offer approximately $33 million dollars, which will facilitate the divestiture process of the Canadian federal ports. If executed successfully, the Economic Action Plan is definitely going to strengthen the Canadian marine ports network.

Funds will only be allotted to the recipients who meet the eligibility criteria set by the government. The applicant can be a member of provincial, local, municipal or regional government, or the applicant can be a representative of private/non-government organizations. Additionally, any individual with proof of legal entity can apply for this program.

The NASP (National Aerial Surveillance Program) is already keeping a watchful eye to make the marine ports networks are as secure as possible, yet the execution of Economic  Action Plan 2014 will further improve transportation security. Although the plan seems well structured and strategically feasible, will it really strengthen Canada’s marine industry?

  • The divestiture will facilitate maintaining and monitoring ports, because it will be easier to manage several small networks of marine ports, rather than maintaining a single large complex network.
  • The government will be installing aerial surveillance for ships, thus ensuring maximum port safety.

In order for Canada to maintain its competitive advantage as an exporter, there is a critical need to upgrade the ports and terminal infrastructure. This is essential to meet the evolving needs of shippers and trade.  To help meet these evolving needs, the Canadian government has pledged over $4 billion dollars to transportation projects in Ontario and Quebec. In the province of Quebec, the federal government has made efforts to modernize ports in Sept-Îles, Saguenay, Montreal, Trois-Rivières and Quebec City. The modernization has helped increase traffic on the Ontario-Quebec shipping corridor.

As one of the biggest and busiest port networks in the world, Canadian ports play a key role in facilitating trade and commerce through marine routes. Therefore, a secure and well-maintained integrated marine network is not only important for Canadian economy, but will also benefit other countries, which rely on Canadian ports for business. The successful divestiture of marine ports will help the government achieve all these goals.

Arctic Shipping in Canada

arctic shipping in canadaArctic Shipping in Canada: Is it in our future?

Global warming has been viewed as a drawback by many industries, but it brought with it a silver lining; the promise of some important arctic shipping lanes and routes in Canada being opened up. However, recent reports show that the opening of arctic shipping routes may be more of an illusion than a reality. The hesitation has been linked to the melting of sea ice, due to the climate change. Shipping insurance companies, as well as shipment clients are concerned regarding delays. Specifically, what if shipments are trapped or even sink in the arctic, due to the floating ice?

Since they have a wider choice of service providers, consumers have become much more sensitive and are not willing to compromise with the quality of the service they receive. As the competition in the shipping industry intensifies, shipping companies must take every aspect in to consideration to ensure they remain competitive.

Some major concerns raised regarding arctic shipping in Canada have been the shallow, unmarked passages which pose the extreme danger of the shipping vessel running aground. This could result in time wastage, damage, as well as extra costs linked to freeing vessels while in transit on the Canadian arctic shipping routes. Marking the arctic shipping lanes does not assure that the shipping companies will opt for this route. There are also additional constraints such as special modifications required on the hulls of arctic ships. The shipping vessels have to be modified to be icebreakers, in order to be able to use these shipping lanes.

Arctic shipping vessels are also considerably smaller than open ocean vessels, which is a major concern for any shipping company. Smaller means less cargo transported, which translates in to having to push up the cost of the cargo being shipped. In today’s competitive world, whereby the consumer is paying very close attention to cost, shipping companies cannot afford to hike shipping prices, as it will definitely result in loss of business.

It is these major concerns that have resulted in the proposition of Arctic shipping routes in Canada becoming more of an illusion then a reality. However, all’s not lost, since the arctic shipping lanes will remain very useful with respect to the transportation of mined raw materials. In demand resources such as coal, ore, oil and gas must continue to be shipped out of the region, despite the hardships and costs of shipping.

Best Practices to Manage Shipping Freight Costs

shipping freight costsBest Practices to Manage Shipping Freight Costs

In a freight market that’s seeing signs of an uptick, a company’s success or failure could come down to a matter of efficient supply chain logistics. Due to rising fuel prices, the cost of maintaining and operating a fleet of trucks has gone up in the past several years. This has affected the next few years of revenue projections for logistic companies.

However, the majority of shippers have managed to dodge the rate increase bullet. This is due, in no small part, to carriers being proactive with their cost management strategies. In these changing economic times there have been some proven practices that help shippers manage their transportation costs. Consider these practices:

Ongoing Procurement and Sales Evaluation

A shipper needs to constantly be on top of their sales and procurement figures. These numbers will have a direct impact on bringing down higher freight fees. Currently, there are many businesses adopting lean initiatives as a way of reducing their inventory levels. In a perfect world, small and consistent shipments would work to provide higher inventory turns. However, as those shipping costs continue to rise, those who embrace lean initiatives will need to find a way to strike a balance between maintaining those minimal levels and their overall shipping costs. Ask yourself, “Are you saving money in one sector, only to lose it in another?”

Review Core Carrier Status

As a concept, utilizing a core carrier shipping mode can provide a level of dependability. However, it can also work against a company when a particular shipment needs to be transported out of the core carrier’s network. For that to be accomplished, the rates will go up. On the other hand, using a secondary carrier to pick up the slack without a rise in costs or breakdown in the supply chain can be an effective practice.

For instance, let’s consider the base tariff. There are many shippers who don’t give those costs a second thought with their core carrier. Yet, those tariffs can add up to a substantial amount. Choosing which of those tariffs can be adjusted by using other carriers could have a positive effect on a shipper’s bottom line. Remember, the goal is to offset as much of these shipping costs as possible to minimize the need for rate increases.

The tide is definitely turning towards reducing freight costs. At boardrooms everywhere, C-level executives are now targeting shipping costs as their company’s prime objective. This shouldn’t be looked at as a belt tightening measure, but instead as a way for shippers to adjust to the changing economic realities. Fuel costs aren’t going to go down any time soon and as economies improve, the basics of supply and demand will kick in to affect. That’s what shipping companies need to contend with in order to stay competitive.