Based on the outcomes of Thirty-fourth Session of the Committee on Fisheries (COFI), which met virtually in february, FAO Members agreed on the need for international guidelines on transshipment in fisheries. Members welcomed FAO’s in-depth study on transshipment, published in December 2020, and expressed concern on the risks that inadequately regulated, controlled and monitored transshipment poses in relation to IUU fishing. (I had a go to this document here).
Yet there are different types of transshipment operations, not all of which have negative impacts on the sustainability of fisheries, and noted that consideration should be made for regional specificities of transshipment operations. So FAO worked on the first draft of the voluntary guidelines and convened an Expert Consultation to review this draft. The expert consultation will take place in Rome next week 11 to 15 October.
I don't know much about who has been invited to the consultation other than my ex-boss and friend Sam Lanwi (ex-deputy director of MIMRA in the Marshals and now deputy Ambassador to UN bodies based in Geneva).
Majuro is the tuna transhipment capital of the world (written a lot of my work there) and the many aspects of transhipment have been the cornerstone of the last 10 years of my work particularly when it comes to PSM, monitoring and logistics… since my fisherman days to now I must have been involved in over 500 transhipments… maybe 20 at sea and the rest in ports of the region with over 280 in Majuro itself).
Without having seen the draft (is only for the experts and they have been asked not to share them) I totally agree we need to standardise the data and the monitoring structure of transhipments, in particular those at sea (I’ll be happy to see them gone or at least only done with independent observers and electronic reporting and Monitoring)
Yet I worry a lot based on what they wrote in the Transhipment: a closer look study that will try to incorporate containerisation in the wharf as part of the definition of transhipment… and that really worries me.., as I not what we do and believe in the region… and here is where we do most of the transhipments in the world and so far I know there is only one representative at the table.
The nuts of the issue is that the Transhipment study recommends,”that the definition of transhipment should extend to indirect transfers through, vehicles, points, containers, installations, facilities, or premises used for the carriage, storage or facilitating the transfer or transit of such catch” and as I believe the same people that wrote this study wrote the draft guidelines… that would be pushed. That will subvert all the PSM work we have done around here and let down PSM itself.
The great thing about PSM is that give the port state the opportunity of not authorising the unloading of fish from a vessel that has not proven his catches are legally caught. Ergo if the fish was illegally caught in the trip just before, the unloading is the time to act! Not month later when fish in a container arrives at some commercial port somewhere else in the world thousands of km from where the IUU event happen and the vessels that committed when back fishing again many times.
PSM are never as effective as in the 1st port and should never be subservient to the customs status of that fish.
Transhipment should only take place in cases where there are clear and agreed definitions of what constitutes “transhipment”. The present definition in the WCPFC suffice and are also reflected by the EU IUU regulation. Furthermore, is consistent with FAO Voluntary Guidelines for Catch Documentation Schemes (VGCDS). This transfer should only happen directly in between two vessels.
In this context, the term “landing” should reflect the definition of the VGCDS means the initial movement of fish from a vessel to dockside in a port or free-trade zone, even if subsequently transferred to another vessel. The offload or transfer in port of fish from a vessel to a container is a landing” and it seems that the intention is that fisheries definition landing should constrained by the prescribed process of entry into a country or to have been cleared as an import by customs.
I really believe that this process will substantially undermine the effectiveness expected of PSM best practices.
In fact that Transhipment study recognises that while an increase in direct transfers of fish from catching vessels to containers has been observed in different regions of the world.
These transfers are variously termed “transhipment in transit” or "transhipment to container" that take place mostly in customs bonded ports, without fisheries inspections or any reporting on the landing or transhipment of volumes and species transferred.
It points that with this activity, a lack of clear definition in terms of landing and doubt over the application of port State measures, all lead to monitoring uncertainties, this in turn increases the risks associated with unloading catches directly to containers, potentially giving rise to high adverse fisheries impacts.
This practice deliberately blurs the line between landing and transhipment, in fact not defining it as either the one or the other. Authorities in the following port will not have clarity whether the catch has been previously landed or not, and no effective port State measures may be applied at any point. In these cases, catch enters the supply chain without any fisheries inspector ever having seen the fish and without any monitoring and control
This significantly increases the risk of IUU caught fish entering the seafood supply chain, when the fish is directly “transferred'’ to containers without any monitoring and control.
In practice, transfers into containers can be used to circumvent port State measures, especially when the fisheries products are assumed to have been previously landed upon arrival at the containers' destination port. It appears that with the growing number of parties to the PSMA and with strengthened port State measures all around the globe this practice could be chosen by certain industry actors as one way to transfer fisheries products into the market without monitoring or control.
Increasing containerisation should not be a reason to start calling landings transhipments.
I also believe that the increase of containerisation is also not as a much portrayed in the WCPO
What is the situation of containerisation in the WCPO?
The Western and Central Pacific Fisheries Convention (WCPFC) defines transhipment as “the unloading of all or any of the fish on board a fishing vessel to another fishing vessel either at sea or in port.”
Up to 2019, around 80% of purse seine product and 22% of longline product harvested in the Western and Central Pacific Fisheries Convention Area (WCPF-CA) has been transhipped on or near the fishing grounds. Yet the figure for LL is increasingly questioned since, contrary to the Commission's intentions and rules, the number of high seas transhipments in the WCPO is increasing.
Reports to the Commission indicate that such transhipments have increased from 544 operations in 2014 to 1,472 in 2019. It appears that high seas transhipments are becoming the norm, rather than the exception. This situation is not conducive to the long-term conservation and sustainable use of tuna resources in the region – a stated aim of the WCPFC.
Interestingly “landing” is not defined in the convention (nor in the key FAO Key reference documents other than the CDS guidelines)[1], yet its understood as “fish that is unloaded to land “(wharf) under the principle that “unloading to port” been the de facto understanding of landing in the agreed data standards to be submitted to the WCPFC.
A recent development has been the increased direct containerisation of purse seine (PS), longline (LL) and Pole and line (P&L) catches that are unloaded onshore (and thus not considered as transhipping as defined by the WCPF Convention.
While in other jurisdictions this is referred as “transhipment to containers”, in all the Pacific Islands Fisheries Forum Agency (FFA) membership[2] is considered a landing/unloading to port under the FFA Post State Measures Framework, independently of the customs rules applying to the port where the operation takes place.
The standardised view is that any fish leaving a fishing vessel while in the port area, either to be transhipped and/or landed can only do so under the authorisation and monitoring of the fishery authority of the port state. The next place of storage of the unloaded fish, being cool store, a processing establishment or a container to be shipped, is irrelevant in terms of PSM best practices to be applied.
The volumes of tuna landed and processed in FFA countries presently represents approximately 14% of total fleet catches within FFA waters[3]. The unloading of fishing vessels to wharf to be then loaded into refrigerated (freight/shipping) from longline, P&L and purse seine operations but is not per se in captured in the regional statistics. While I’m working on the final numbers for FFA that is likely less than 2 to 3 % in comparison to the catch currently transhipped to reefer carriers
Landing, sorting and containerisation is enticing for processors in the countries of destination (mostly in terms of production planning and logistics), yet also provides some benefits for the ports where it happens, as it provides employment opportunities.
Furthermore, as longs as it is done in the framework of PSM, it facilitates monitoring by the port state authorities in terms of legality (not unload unless proven legal) including a better monitoring of volumes by species during unloading, but also during logistics since they have a maximum allowed capacity (20-25 tons), depending on the freight company.
The industry standard is 40ft refrigerated containers, based on the needs (PS or Longline) they can operate form the regulatory required of -18C down to -65C in specially insulated containers.
As discussed above, reality is that only a limited fraction by total volume of the tuna caught in the region is landed in Pacific Island Countries (PICs) and an even smaller containerised. Limited competitive onshore processing capacity and limited port facilities are the key reasons for this reality.
Proximity to the raw material, the major comparative advantage over processors based outside of the region has not proven to be a sufficient advantage to generate an expansion of domestic processing.
Country specific and regional impediments include (but are not limited to) logistical issues, small domestic markets, lack of appropriate port infrastructure, market access issues, the lack of economies of scale, land availability and higher utility and other production costs[4].
There is always people involved and volumes measured during containarisation
Carriers vs Containers
As discussed, with few processing facilities handling purse seine fish in the region, transhipping is the predominant way to getting the fish from the WCPO fishing grounds to the processing centres in Asia (Thailand, Vietnam, Philippines) and Ecuador.
The big three trading companies (FCF, Trimarine and Itochu) charter carriers and place them in the in a few ports (Majuro, Pohnpei, Rabaul, Funafuti, Honiara, Kiritimati and Tarawa) depending on shifting fishing grounds and licensing conditions. Some companies (mostly from Taiwan and Korea), operate their own carriers in conjunction with their vessels.
Of the 232 carriers on the WCPFC Record of Fishing Vessels register above >1,000 GT in March 2019, an estimated 140 are active in transhipping fish from the WCPO. Of these, over half were flagged to Panama. Of the remaining fleets, Korea had the next highest number of active vessels with 27 (owned by only 7 companies), followed by the Philippines (14 vessels) and China (9 vessels).
Interestingly, the COVID-19 pandemic has strengthened “transhipment in port” as safe bet and will potentially incentivise investment in extending the life of the present fleet of carriers and the constructions of new ones.
Mr Lee (2021, per comm) a tuna operator I know with more than 30 years in the industry said: “If we didn’t had carriers they wouldn’t be any canned tuna in the market by now. And if there something we know in fishing, is not to have all your eggs in one basket, and with fishing vessels not allowed to land in most pacific island ports for over a year, containerisation was impossible, and we will in trouble"
This is in coincidence with MRAG (2019)[5] that reports that most fishing companies, traders and carrier operators interviewed for their study reported that containers had relatively little influence on the market to date, apart from squeezing margins from the old carrier business. Most thought that carriers would continue to be the dominant method of transporting fish to market for the “foreseeable future”
The most common reasons given for this view were that:
loading of containers was too 'fiddly' and time consuming – in the purse seine sector, unloading to conventional carrier typically took 3-4 days, while unloading to container typically took 6-7 days. Given limited wharf space in many Pacific Islands, some interviewees also noted that fishing vessels unloading to containers would often be 'kicked off' wharf to allow higher priority container or bunker ships to unload. Ultimately companies saw this as a loss of fishing days and therefore money
container facilities and logistical support are very limited in most Pacific Islands at present.
the slower nature of loading containers also presented risks to the cold chain and some companies reported having problems with reliability of containers, leading to rejection of fish at market
scheduling is a problem in Pacific islands – because volumes are very small, there is uncertainty about when fish can be delivered to market (by contrast, dedicated conventional carriers are a direct “door to door'' service). The lack of 'backfilling' opportunities would also undermine the economics of container carriers
Our port Containerisations depend on efficient and cost-effective port operations, yet port capacity and infrastructure in the Pacific region has historically been limited, most ports in the region are well below international standards in terms of infrastructure and operations
Electricity infrastructure is very limited and expensive in the region a 40' refrigerated container set at -21C and operating at a ambient temperature of 37.8°C, has average power consumption values of approximately 5.3 to 4.5 kW according to the type of refrigeration unit used
Two of the companies involved in providing high seas longline carrier services said containers had had very little impact on the high seas transhipment business to date, noting that containers were ‘only competition if vessels came to port’
A further aspect seldom addressed, is that carriers have also a fundamental role in providing good and parts to fishing vessels (i.e. food, mechanical parts, oil, salt, foaming and cleaning agents, ropes, cabling, net components, fishing gear, etc.).
Using salt as an example; FFA (2021)[6] reports the use of an estimated annual use 140000 tonnes of bagged salt used by the Purse Seine fleet in the FFA Membership (with the qualification that these are conservative numbers).
Salt is delivered to PS by carriers while at sea, prior or during transhipments. As reference point the number of containers needed to transport this volume into the PICs using an avg weight limit of 20 ton per container is 7000 containers. This figure can be substantially more than the present annual total number of containers handled by most ports in the FFA membership.
Carriers have also a fundamental role on crew rotation and replacements on the fishing fleet. Since is substantially cheaper to have crew as passengers on carriers to then meet the vessels in the HS or in port, than to fly them to the Pacific Islands. This extends to visa issues since the gateways for flights to Pacific Islands are USA, Australia and NZ that require transit visas for most SE Asian nationalities, which are expensive and difficult to get, particularly for those without credit cards.
Comparative costs
Cheaper costs of shipping fish in reefer containers as compared to shipping fish by reefer vessel to cannery locations is of critical importance for the practice of containerisation, yet prices varies according to location, the availability of containers (which can be problematic in most ports in the pacific given the relatively small amounts of frozen inbound cargo and which can therefore require sending in empties), plus changing and fluctuating rates of third party shipping companies required to move containers from the end point of shipping company routes to canneries.
FAO (2021) [7] analysed the typical costs of shipping containers from Majuro (excluding all shore-based costs of stuffing containers, plug-in etc)[8] to canneries in Thailand and Indonesia, these are estimated to be in the order of USD 200-275/tonne. Over 2018-2021 the cost of shipping a 40ft container from RMI to both Bangkok and Jakarta by the Mariana's Express Line (MELL) ranged from USD 5 000 to USD 7 000, but an average/typical cost was USD 5 500 (i.e. USD 211 per tonne if containers are stuffed with 26 tonnes, or USD 275 if only 20 tonnes is in a containers). Other indications are that shipping costs (excluding all shore-based costs) may typically be USD 300-350/tonne.
While costs charged by carriers for the transport of fish to canneries in Thailand and other main destinations vary for macro-economic, geographic and seasonal reasons, the cost ranges from 240 to 350 USD per ton, with no shore-based costs.
A recent article from The Economist (18 Sept 2021)[9], reports the average cost of shipping a standard large container (a 40-foot-equivalent unit, or feu) has surpassed $10,000, some four times higher than a year ago (see chart on the right).
The spot price for sending such a box from Shanghai to New York, which in 2019 would have been around $2,500, is now nearer $15,000. Securing a late booking on the busiest route, from China to the west coast of America, could cost $20,000.
Globally 8m teus (20-foot-equivalent units) are in port or waiting to be unloaded, up by 10% year-on-year. But disruption after disruption means that the containers are losing their reputation for low prices and reliability. Few experts think things will get better anytime soon. The dislocations could even hasten a reordering of global trade.
In the first seven months of 2021, cargo volumes between Asia and North America were up by 27% compared with pre-pandemic levels, according to BIMCO, a shipowners’ association. Port throughput in America was 14% higher in the second quarter of 2021 than in 2019. There has been little growth elsewhere: throughput in northern Europe is 1% lower. Yet rates on all routes have rocketed (see below), because ships have set sail to serve lucrative transpacific trade, starving others of capacity.
So yea… I’m no one among the experts, yet I really hope that containerisation is NEVER included into the transhipment definition, as is going to be a mess, furthermore it only favours the dodgy countries that allow it to happen without any controls from its fisheries authorities.
We have a hard time already, to have smug operators come to challenge us (as they already did) showing us a FAO document that goe against what we are trying to do
References
[1] Landing” means the initial movement of fish from a vessel to dockside in a port or free-trade zone, even if subsequently transferred to another vessel. The offload or transfer in port of fish from a vessel to a container is a landing. http://www.fao.org/3/i8076en/I8076EN.pdf
[2] Australia, Cook Islands, Fiji, Kiribati, Marshall Islands, Federated States of Micronesia, Nauru, New Zealand, Niue, Palau, Papua New Guinea, Samoa, Solomon Islands, Tokelau, Tonga, Tuvalu, Vanuatu
[3] FFA, 2020. Economic and Development Indicators and Statistics: Tuna Fisheries of the Western and Central Pacific Ocean
[4] FFA, 2017. Economic and Development Indicators and Statistics Tuna Fisheries of the Western and Central Pacific Ocean
[5] MRAG, 2019. MRAG - WCPO Transshipment Business Ecosystem Study
[6] FFA, 2021. An assessment of fishing vessels plastic waste generation in the WCPO region, and potential measures to improve waste management in the fleet.
[7] FAO, 2021. The purse seine tuna fishery value chain in the Republic of the Marshall Islands: Phase 1 project design report. (in press)
[8] But including insurance premiums that shipping companies pay to their insurers which are built into shipping costs, and which in turn are based on long-term assessment of any claims made against the shipping companies for damaged fish.
[9] A perfect storm for container shipping. https://amp.economist.com/finance-and-economics/a-perfect-storm-for-container-shipping/21804500