Fednav’s experience with bwts in the great lakes SLELO PRISM Symposium, Pulaski 2017-06-07

Innovative solution for the great lakes Announcement in April 2015 Order for 12 BWTS for lakers under construction Why did we do this?

FEDNAV Incorporated in 1944 Privately held Headquartered in Montreal Largest Canadian dry-cargo shipping group Leaders in ice-class international Handysize/Supramax bulk carrier ownership and operation 30% of ocean-going voyages in the Great Lakes (177 in 2015)

OWNED FLEET + 18 bulk carrier on long-term charter (+ 2 on order) Ship Type and Size Current On Order Handysize Lakers (27,500 to 37,000 DWT) 41 6 Handysize (37,000 DWT) 8 -- Supramax (53,500 to 56,000 DWT) Icebreakers (25,000 to 32,000 DWT) 3 TOTAL OWNED by Fednav 58 + 18 bulk carrier on long-term charter (+ 2 on order) + 22 bulk carriers on short-term or voyage charter (as of 2017/05/17)

360 different ports visited each year Top 10% of ports visited

Regulations in the great lakes: chaos in 2008

REGULATIONS in the great lakes: now Harmonization of standards: IMO / USCG / EPA Some harmonization under the EPA’s Vessel General Permit 3 specific permits Michigan Minnesota Wisconsin Specific requirements, e.g.: Saltwater Chemicals

BW Treatment systems and METHODS IMO Type-Approved 70 USCG Type-Approved 3 Ballast Water Management Methods Treatment Mechanical Physical Chemical Disinfectants • Organic biocides Electrolytically generated copper and silver ions Manipulation of ambient conditions Filtration • Cyclonic separation Thermal (Heat) • Ultraviolet Ultrasound

OUR solution All about a process Began 15 years ago Multiple testing Federal Yukon Copper ions Federal Welland Electrodialytic Disinfectant Federal Venture Chlorination Millions of dollars

Federal yukon – 2001

Federal welland – 2005

Federal Venture – 2012

federal biscay - 2015

JFE System Filtration Backwash design 1,500 m3/h Chlorination Up to 20 ppm 12% liquid chlorine Ballast tank holding time 24 hours minimum Neutralization Sodium sulfite

INSTALLATION Timeline October 2015 January to September 2016 January and May 2016 Delivery of Federal Biscay Delivery of 6 C-Class lakers Installation on 2 Supramax Installation on 5 B-Class lakers, pending USCG approval

Implementation going forward New builds - Deliver with systems 4 Handysize (2017/2018) Announcement in April of an order for 4 BWTS from Optimarin, AS Optimarin AS, of Norway, is the first company (out of a current total of three) to have a BWTS approved by the US Coast Guard, a condition to operate in the waters of the United States The Optimarin system is based on filtration and high doses of UV irradiation for inactivation of marine organisms, viruses and bacteria. Ballast water is UV treated both during ballasting and de-ballasting to ensure the dual UV effect. The system is certified to operate in all salinities (freshwater, brackish and seawater).

Design Changes to new vessels

MOVING TOWARDS IMPLEMENTATION Though a challenge, the current standards can be met in practice Many BWTS are installed, but very few are utilized Challenges remain: How may approved systems before the USCG removes the extension? Implementation timeline for new ships and retrofits will be challenging The severity of the financial crisis afflicting shipping

CONCLUSION This is a solution for Fednav, not necessarily for others We are taking a calculated risk, by Moving before regulations Installing non-approved systems Dealing with the 72-hour retention time on UV systems We are doing it, because of: Environmental considerations, esp. in the Great Lakes Commercial considerations (availability, cost, etc.) This is the right thing to do