Transport: Sri Lanka Port Issue Casts Shadow on Class 7 Cargo

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A controversy surrounding a Shanghai-bound nuclear fuel shipment at a Sri Lankan port last week put yet another pox on nuclear transport in a maritime industry increasingly risk-averse to Class 7 radioactive cargo. While nuclear transporters have some traction over the issue at the International Atomic Energy Agency (IAEA), they may need more forceful action among nuclear energy states to prevent supply disruptions. "Both industry and governments are going to have to be engaged proactively to not only reinforce the supply chain that exists, but to ensure it has potential to diversify," TAM International CEO Kurtis Hinz told Energy Intelligence. "Engagement has to come with the view that this isn’t necessarily a commercial problem and if you just increased the price, it would resolve the issue. The volumes in the fuel cycle simply aren’t large enough in comparison to other products routinely being shipped. There needs to be a real understanding that if a couple carriers or ports no longer accept this material, there could be significant supply chain issues in moving material around the world." Corporate consolidation in the shipping industry and a shift to larger vessels have over the last decade reduced the number of carriers willing and able to carry Class 7 cargo -- a broad category that includes both fissile and non-fissile radioactive material (NIW Oct.27'17). Of the top 15 ocean carriers, only a handful still ship Class 7 material and mostly in the non-fissile category, with a few exceptions made by state-owned companies for domestic needs and national interests, such as in China and South Korea, or under exclusive contracts with certain suppliers. The Covid-19 pandemic exacerbated this trend, with international trade falling dramatically beginning in March 2020. Trade resumed with vigor this year but that created a backlog, which increased pressure on shippers to prioritize cargoes that drive profit. If a vessel is denied entry to a port because it's carrying Class 7 cargo the financial impact on the liner can be much bigger the more cargo it is carrying. The reasons for these denials vary from regulations that for all practical purposes make docking impossible to political dynamics that can turn unintended missteps in fulfilling such requirements into a media firestorm. So not only is the relatively small business of transporting natural uranium, nuclear fuel or spent fuel not a priority in the current commercial maritime environment, it's a potential liability to the carrier's bottom line. The result for end-users in the nuclear trade is a narrowing window of transportation diversity and more expensive charter freights. Maritime Aversion These risks were underscored last week when a chartered vessel carrying a Urenco shipment of enriched uranium hexafluoride (UF6) from Rotterdam to Shanghai made an emergency stop in Sri Lanka to deal with engine trouble. The BBC Naples entered Sri Lankan waters on the night of Apr. 20 and docked at the Chinese-owned Hambantota Port, which is a focal point of local and regional grievances over fears of Chinese encroachment in the region, and which sits only a few hundred miles from India's southeast coast. According to the Hambantota International Port Group, a public-private partnership between the government of Sri Lanka and China Merchants Port Holdings (CMPort), the BBC Naples failed to notify port authorities of its Class 7 cargo. Industry sources say the material was declared but that port authorities failed to inform the national regulator. Whatever the case, when the regulator was informed the ship was ordered out to sea until the proper authorizations could be made. It then re-entered the port to make the repairs before continuing on its voyage to China. While this relatively humdrum bureaucratic episode played out, the incident was quickly engulfed in media coverage as "evidence" of the dangers of Chinese control of the port -- and Beijing's alleged influence in promoting legislation in Sri Lanka that would be favorable to its interests in the Democratic Socialist Republic island country. Shippers of Class 7 material, however, worry the disruption may lead to more port authorities banning Class 7 material. The Euratom Supply Agency (ESA) in March 2020 report identified the “lack of transport hubs open to nuclear shipments” as "problematic," citing decisions by several European ports to follow "local political decisions not to accept any new shipments of nuclear material." But the problem extends to Asian countries and even to those with their own nuclear programs such as India and China, both of which have seen ports or associated facilities ban Class 7 cargoes. This is a major hindrance for carriers, reducing their options for delivering or picking up cargo, and for ships in trouble or needing emergency repairs or refueling. In a presentation in March this year to the IAEA's "denial of shipments" working group, Orano NPS transport chief Michael Meier proposed that the liner vessel clearly explain to all port and regulatory authorities "all process and to demonstrate that shipments are done as per international rules and regulations" as well as proposing "trainings to stakeholders, ports, crew." The IAEA working group is expected to release in the coming weeks a chairman's report outlining proposed solutions. More than 60 member states of the UN adhere to the so-called UN Model Regulations for the Transport of Dangerous Goods, based on IAEA transport regulations. The IAEA regulations have also been adopted by the International Civil Aviation Organization and the International Maritime Organization. But the ESA report notes that part of the problem at transport hubs is the "lack of harmonization and multiple regulation in transport authorization." Another problem with few solutions so far is an "insurance gap." The mere possibility of contamination has in the past resulted in the suspension of port activities for days. A 2015 event involving a dropped flat rack of overpack for UF6 cylinders resulted in no contamination, criticality, release or injury at a Canadian port, but insurers refused to cover the incident. Jessica Sondgeroth, Washington

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