• Sunday, January 20, 2019

Industry insight: A fresh perspective

By BCShippingNews 13 December 2018
Bart Reynolds, President, Seaspan Marine
Bart Reynolds, President, Seaspan Marine

As President of Seaspan Marine and the person accountable for the success of that company’s tug and barge business, Bart Reynolds has been applying lessons learned from diverse sectors in the marine transportation industry around the world, most notably, the oil and gas sector. Because of this, the insights he is able to impart about B.C.’s tug industry come with a perspective that is both fresh and unique. As Reynolds points out, the equipment may look a bit different but the basic principles are the same. And of those principles, that of “safety first” resonates the most with him. Given his success in leading Seaspan Marine for the past four years, that principle is showing up in a number of areas, not the least of which are training and vessel maintenance.

BCSN: Tell me the steps you’ve taken to reach your current position.

BR: After graduating from the University of Texas with a Masters of Business Administration, I started working with Tidewater Marine — a company that owns and operates the world’s largest fleet of offshore supply vessels. I took on various positions with the company that took me to places like West Africa, the Mediterranean and Latin America. It was very interesting work, culminating in my position as Vice President — Americas for GulfMark. An opportunity at Seaspan came up right when the industry was taking a downturn. That was almost four years ago.

While the equipment was quite different — I dealt with a lot of platform supply vessels, anchor handling towing and supply vessels — the playbook that drives the marine industry in terms of being smart with capital, learning about the regulatory regimes and dry docks is very similar. I learned the rules of the playbook in the oil and gas industry and am able to apply them here.

BCSN: What attracted you to Seaspan?

BR: There were a few considerations. I had been working for a publicly traded firm and liked the idea of working for a private entrepreneurial firm. I had always thought that if an opportunity to work with someone who was a visionary in business, I would be hard-pressed to turn it down. Dennis Washington and Seaspan rank up at the top for being entrepreneurial.

A private company was appealing on additional levels — they tend to put more emphasis on a longer-term strategy whereas public companies focus on financial quarters. Private companies measure success in decades, not quarters.

And Vancouver is an amazing place to live.

BCSN: Could you provide an overview of current activities?

BR: We have over 30 active tugs and about 120 barges. We’re lucky to be diversified in a number of different businesses: ship docking and escort; the chip and hog fuel business; log-barging; and general towing of rail cars and construction aggregates for the cement industry. Combined, we’re kept quite busy. 

In terms of current activities, all towing sectors are steady — chips, log barging, rail, cement and aggregates. We’re not expecting any changes to the sector in the foreseeable future, at least for the next three or four years. While ship docking has also been pretty steady, we’re seeing the size of the ships getting bigger and we expect that trend to continue.

Looking at regions of operations — the Fraser River, Vancouver Harbour and Victoria — Victoria, while it’s a very small base, did pick up a bit this year. It’s been a good year and is expected to continue to be busy next year.

BCSN: You mentioned that the ships you’re docking are getting bigger. How is that impacting on your fleet and capabilities?

BR: We have ample resources today to handle the market over the next five years. Over the last 10 years, we’ve acquired some very good ship assist and escort tugs as well as coastal and ocean tugs — most recently, the Seaspan Raider and the Seaspan Rogue but also the Seaspan Eagle, Osprey and Kestrel a few years before that. As we continue to replace older vessels over time — especially some of the older Cates tugs — it will be for tugs with higher horsepower.

Over and above replacing vessels, we have a fairly solid maintenance plan. Refits are done constantly — there are always multiple barges and at least one tug in the yard at all times. It’s a very maintenance-intensive industry.

One of the biggest challenges facing the industry today is the recapitalization of the fleets. Luckily, we live in an environment where steel lasts longer than it does in other parts of the world but still, there comes a time when it’s not economical to continue to put money into an old tug and it has to be scrapped and replaced. Replacements costs are huge and very few companies are investing in new equipment.

Outside of ship docking and escort, there won’t be a need for more powerful tugs. An argument can actually be made for going in the other direction to consider more fuel efficient options which typically will drive down the horsepower. You don’t need high horsepower all the time — for example, if you have power based on a battery hybrid that gives you 1800hp most of the time, you can boost that to 2400hp with the batteries for the rare occasion when you need it.

BCSN: In addition to increased ship size and the impact that has on escort tugs, what other trends are you seeing in the industry?

BR: While most of my career has been spent in the oil and gas sector, I see the same increased focus on safety in the tug and barge industry. For oil and gas, the industry went from being very high risk to one of the safest in the world. I saw the benefits that come from having a top focus on safety and it has been my number one priority since I walked through these doors. We have to be focused first and foremost on safety.

Training is another area where I see a change. The emphasis is moving more toward competency than just certification and ad hoc training. When we were young, training depended entirely on the teacher and you would pick up all of their habits, good or bad. And even if they were very experienced, it didn’t guarantee that all of their skills would be passed along. Now, there’s much more structure to training and it’s based on the ability to prove you’ve been able to master each skill.

A good example of the move toward competency-based training is our new five-year, multi-million-dollar agreement with Seaways Global, a U.K.-based provider of marine and training and tugboat simulations. Rather than simply receiving a certificate at the end of the course, you’re put through a live vessel training exercise where you prove you have mastered all of the skills we need you to have.

Further to this, the use of simulators has become a great tool for training. While we’ve been using Seaways’ facilities overseas for several classes since implementing the agreement, we’re currently installing a multi-console tugboat TRANSAS simulator here at 10 Pemberton Avenue in North Vancouver and expect to put the first group through in January. And in addition to training our employees directly, the contract includes a “train-the-trainer” component.

BCSN: Is technology impacting other areas of the tug industry — more automation, for example?

BR: There’s a lot of talk about automation and autonomous vessels, but it hasn’t hit the marine industry yet to a great extent. I think in large part because it is a pretty small sector. There are less than 100,000 commercial vessels in the world so it’s more likely you’ll see automation in industries like long-haul trucking or factory automation before you see it in the marine sector.

Eventually, it will get here but before that, we’ll see changes coming to power — diesel electric, battery hybrids; dual fuel like LNG/diesel. Installing LNG dual fuel is a challenge for tugs but battery technology is advancing significantly — the space required for power storage is the biggest factor and, for batteries, the ability to store more power in smaller spaces is getting better all the time. We’re at the front end of game-changing technology so who knows what’s around the corner — hydrogen for example.

BCSN: I’d like to jump back to your comments on the issue of safety for a minute. The Transportation Safety Board recently released Watchlist 2018 which recommends that Transport Canada implement regulations requiring all commercial operators to adopt a formal safety management process and oversee these processes effectively. Could you describe your own safety management system (SMS)?

BR: I’m a big believer in making SMS mandatory. I’m actually surprised that it’s not already. At Seaspan, we already have a safety management system in place and surpass the regulators but I’m happy to see them continue to raise the standard on what’s acceptable.

BCSN: The TSB Watchlist also addressed the issue of fatigue and recommends that Transport Canada require companies to have a fatigue management plan. Could you comment on that in context of your experiences?

BR: Fatigue is an issue that all tug operators must manage. Over the last decade, there has been more discussion and consideration of it but I don’t think there’s a silver bullet or one-size-fits-all solution.

For the West Coast, crew rotations are much shorter than in other places around the world. A lot of crew work is based on a five-week rotation — one week of day shifts; one week off; one week of night shifts; and two weeks off. Shift work and changing hours is tough and providing more time off following the night shift is one way we try to mitigate the impact it has.

We also hold a one or two-day conference every year for staff and this year, fatigue is one of the hot topics. There are so many different levels of fatigue where some things are in your control and some are not — everything from diet, nutrition, exercise, medications and sleep habits where everyone is different and what works for one doesn’t necessarily work for another. We’re trying to bring all of these factors to the forefront and have an open dialogue. You shouldn’t be afraid to say you’re too tired to perform a task but when that happens, we need to have checks in place to be able to address it. If it happens frequently, you need to get to the root cause — whether the person has had enough rest before showing up for work (some people have more distractions at home than others) or if they’re suited to a particular watch rotation. Currently, our industry is dominated by something called the ‘square watch’ which is a six-hour on/six-hour off shift. My personal preference is for a 12-hour watch so a lot depends on the particular person. 

To call for a mandatory fatigue management plan is a bit like pulling at a thread on a sweater. I think it’s good that the TSB is raising it. I can see areas where there could be improvements — for example, requiring a bridge navigation watch alarm system on vessels of certain sizes. That would be one additional tool at our disposal to address the issue.

BCSN: A question I’d like to ask related to this is whether you’re finding enough qualified crew.

BR: There is a scarcity of skilled crew industry-wide right now. We don’t have a hard time getting new and inexperienced people — the problem is getting them the time to build their licences. Unfortunately, the marine industry has this archaic system based on sheer number of days at sea to complete before you can get a licence. It’s crazy — no one even looks at what the vessel is doing. You just have to be part of the crew without proving you’ve done a specific task. That’s one of the challenges we have and part of the reason we went the route of Seaways. It allows us to make sure that we’ve already got people who are trained and ready to go before we need them.

BCSN: Just before we end off, do you have any comments or forecasts on future activity for the industry?

Certainly the LNG Canada project in Kitimat is one that will increase activity. We’re about five years away from the facility being in operation but I would anticipate there will be some opportunities for barging from here to Kitimat or from Prince Rupert to Kitimat as the terminal is being built.

There are other projects we’re hoping will get a green light over the next few years — for example, the new Massey crossing in whatever form it takes. And of course, there are projects like G3 and Centerm’s expansion which will also generate more work for the industry.

The tugboat industry in B.C. is strong and will continue to be so for a long time.  

About Bart Reynolds

Bart Reynolds joined Seaspan as President, Seaspan Marine in May 2015, bringing with him over 20 years of experience in positions of leadership and senior management across diverse sectors of the marine transportation industry. A graduate from the University of Texas at Austin’s Masters of Business Administration (MBA) Program, Bart also holds a Bachelor of Business Administration (BBA) and Bachelor of Arts (BA) from the University of New Mexico.

Reynolds spent over 15 years with Tidewater Marine, owner and operator of one of the largest worldwide fleets of offshore supply vessels – first as Area Manager for the Mediterranean and Red Sea before taking on management positions in West Africa, Latin America and the United States. He most recently served as Vice President, Americas at GulfMark Offshore Inc. – a company which operates 72 offshore vessels and services every major offshore energy market in the world.

Bart now lives in Vancouver with his wife and two teenage sons.

About Seaspan Marine

Tracing its roots back to the late 1880s when Charles Henry Cates started his first business operation, Seaspan
Marine’s history is synonymous with the history of tugs in Vancouver Harbour and the West Coast. Throughout the first half of the 20th century, various acquisitions and mergers between Vancouver Tug, Vancouver Shipyards, Vancouver Barge Transportation and Western Tug & Barge ultimately provided an opportunity for Genstar, which had acquired Island Tug & Barge, and Dillingham, which had acquired Vancouver Tug, to merge and form Seaspan International Ltd. in 1970.

A few years later, after Genstar had obtained full ownership of Seaspan by purchasing Dillingham’s interest, Imasco Ltd. acquired Genstar to gain controlling interest in Seaspan. In 1986, Imasco sold Seaspan to the McLuan Capital Group who also acquired Vancouver Drydocks in 1991.

Dennis Washington first entered the Vancouver tug market through the purchase of CH Cates and Sons in 1992. Throughout the 1990s, he continued to expand his presence by acquiring first, a partial interest, and then full ownership of Seaspan and its subsidiaries in 1996. Further acquisitions in the later 1990s included Marine Petrobulk Limited, Kingcome Navigation and Seaspan Coastal Intermodal. Seaspan acquired further assets in 2010 (from SMIT Marine Canada) and 2011 (from Van Isle Barge Services Ltd.).

Today, Seaspan ULC comprises six companies, including the shipyards (Vancouver Drydock, Vancouver Shipyards and Victoria Shipyards), a bunkering service (Marine Petrobulk), Seaspan Ferries and Seaspan Marine.