BOW WAVE 114

Reinventing the Baltic Edition

news and views on trade, insurance and risk

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Wavy Line	sam@wavyline.com
(c)2002 WavyLine.com	Issue No 114 28 Jan 02
Published free of charge to Readers
Editor: Sam Ignarski
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In this issue:

1. Welcome
2. Reinventing the Baltic Exchange
3. JoC Event
4. Asbestosis World
5. Readers Offer
6. And Finally...

1. Welcome

Bow Wave in the News.......

From this week's edition of Maritime Transport in LAC (Issue 36), Jan Hoffmann's excellent round up of the ports and shipping scene in Latin America and the Caribbean, we read:

"Taken from Sam Ignarski’s Bow Wave:

How many people are using these new container portals? Quite a few. Maersk Sealand alone has 25000 registered e-customers and handles more than 2.5 million tracking requests. Its sites get more than 30,000 hits per hour. The CargoSmart people (led by Ken Chih) have 800 active companies using CargoSmart and the system currently is handling about 40000 active shipments today. Inttra has 1400 registrants from 400 companies in 50 countries. It claims to have managed more than 35000 bookings. These are not tiny numbers and we imagine they will climb and climb based on these economics: According to Forrester Research the total cost for handling routine enquiries, end to end on one shipment (based on the estimate that each shipment will generate nine enquiries altogether) are: $295 via phone, $83 via e-mail, $11 via Web self-service."

Obtain this highly regarded e-letter from:

JHoffmann@ECLAC.cl

New Readers this week include:

Captain Robert Moore, President of Coastwatch in Washington State Alex Olcese, Chief Operating Officer, AllChem Industries in Florida Michael A. Young, Senior Logistic Director, Westin Foods, Nebraska Poul Hansen,Economic Affairs Officer, UNECE Transport Division, Geneva Jack Grinovich in Oklahoma City
Margit Pollard of Multimodal Services in Florida
Hank Mullen, President of ABM
Tim Yorke, Manager of Impact Plus in the UK
Rainer Kinhofer, of Crowley American Transport in Florida Alaster Love of CH Robinson

News of Readers this Week: Michael Farlie

Michael worked for many years for the HK Shipowners Association.Since 1997 he has been living in Vancouver but is having to take it easy owing to illness. We learn he still reads Tradewinds and Lloyd's List, copies of
which are provided by David Koo, who at one time was the HKSOA Chairman during Michael's watch.

Michael follows events in HK closely, and is a regular Reader of Bow Wave.

Contact him at:

mfarlie@hotmail.com

Our item on the trifling costs of incorporating a shipping company in countries with open registries (also known as focs) produced this helpful reply from someone who knows the Panamanian register well:

"Regarding fees for Panamanian Companies, the USD 750.00 is a price which may be called relative. It can cost the shipowner as little as that or it may run into thousands of dollars. The reason why? Because the only fixed charges are minimal (taxes official stamp duty and notaries). Most of the price of incorporation is left to the price each Panamanian lawyer decides to charge for their services and advice. The costs from year to year follows the same principle. Government fees are USD 150.00 by way of tax and a further USD30.00 surtax if you are late to pay. The rest are fees charged by the lawyers for providing a Resident Agent (which is a must), Directors and so forth

Some of the good things about Panamanian companies are that they are easy and
simple to manage, they are not liable to not pay income tax, there is no need
to file returns, and special power of attorneys do not have to be registered
at the Public Companies Registry."

Not a bad week at all with a lot of incoming news from Readers:

Enjoy

2. Reinventing the Baltic Exchange:

The following Quarterpoints column by your editor appeared last Tuesday in Lloyd's List. Normally a resonant silence follows such things, but this one seem to strike a chord...

The Baltic Exchange has always produced a complicated response in the hearts and minds of people who work in the shipping world. It is still easy to mourn the old Exchange building, a monument of praise to shipping, a dignified space framed in wonderful marbles and decorative stone containing sounds and more and more echoes during its last decades. How we hoped, after its senseless destruction by bombers, that the effort would be made to restore the old place to its former glory! Even though we all knew in our heart of hearts that there was no practical sense at all in restoring an edifice to the commercial past.

It is said that confusion attended the efforts of the truck bombers who did for the old Baltic Exchange. Not knowing exactly what the Exchange in St Mary Axe was for, they took it to stand for the notion of exchanges in general in the financial capital and took measures to destroy it as an act of political terrorism on the evening following the election of John Major's conservative government. This was something of a paradox if only because exchanges as physical places were beginning to matter less and less in the capitalist system.

All this took place on the eve of the new communications age which was increasingly seeping into the world of shipping. The new Baltic Exchange was looking for its new role and home against a backdrop of physical loss, a complicated resolution of the issue of where to go next and the pressures of globalisation which were forcing the occupation of broker to reinvent itself.

There were times in the last five years when the Baltic Exchange looked stranded against the efforts of the dot.com innovators, when its mutual qualities seemed to slow the progress of reinvention to a crawl and when its preoccupation with the physical site of the Baltic seemed a side show to everyone who did not have a stake in the property.

In recent times, there are unmistakable signs that the progress of the Baltic into the future is proceeding at a quicker pace. It is apparent in the work going on to harness the functionality of the internet, to generate valuable information to the market, to capture the ethos and occupational ethics of shipbroking and to preserve the humanness of the market in the physical sense.

It is possible to see this as an observer not only because the word of mouth of the market says it is so. The Baltic Exchange has abandoned the habit of thinking that what it does and says is self-evident and approved by all right thinking people. Instead it issues regular news of what it is doing, it makes a decent fist of trying to explain what it is about on its website and its press statements are void of the institutional complacency which so often is the unintended giveaway of trouble when conservative industries announce the progress of reform to the outside world.

I can see in the reform of the Baltic the seeds of what must come in the marine insurance equivalents in London. This starts with a general understanding that the essence of the occupation is more important that the physical place where that occupation has been traditionally practised in the pre-internet age. The essence consists of a great variety of ethical, commercial and professional standards which have evolved and must continue to be evolved under the aegis of the leading practitioners of the trade, occupation or profession. I met a shipbroker in Hong Kong once who said that he was not a member of the Baltic, nor would want to be, because of the things he had to do every day which were not acceptable to the exchange. It is striking that the Baltic's website devotes a lot of space describing its code of conduct.

In another part of the site is described another part of the future of any market, the publishing of information and indices. Four daily dry indices and 24 individual routes are published at 1300 London time and Eleven individual tanker routes are published at 1600 London time. A list of dry bulk fixtures concluded over the past 24 hours is gleaned from the market and published on a daily basis at 1300. It is generally regarded as the most comprehensive list available. I do not know whether the new BalticExchange.Com service will deliver to subscribers the best information and service needed to fix ships, but the future will undoubtedly belong to the organisation or firm that does. The mutual quality of the Baltic gives it a decided edge when it comes to the role and functions of trusted third parties. Can it only be three years ago that leading members of the shipbroking world were saying that the inefficient and incomplete distribution of market information was essential for the survival of their way of life?

Finally there is the transactional part of the system which is so crucial to reform. The traditional administrative methods of agreeing a fixture and producing a charterparty, are every bit as laborious and efficient as providing a contract of marine insurance by traditional means. Given the cost pressures under which modern shipping and transport nowadays operates, it can only be a matter of time before the most cost-effective techniques prevail. The post maritime dot com formula for success more and more seems to consist of a mixture of on-line services: the provision of highly specialised information which is available to customers on a self-service basis and a collection of slick, cheap on-line processes which considerably reduce the costs and delays of the back office.

Ethos, information and automation of service are all part of modern reform. They must be capable of distribution around the world around the clock in an industry whose individual members prize the need to know the people with whom they deal.

3. JoC Trans-Pacific Conference

Editor Peter Tirschwell of the Journal of Commerce has reminded us of the forthcoming Trans-Pacific Maritime Conference, scheduled for March 3-5 in Long Beach, California CC Tung, chairman of OOIL, will be the keynote speaker. Some of the main themes this year will be the upcoming and potentially volatile ILWU negotiations, cargo security post- Sept. 11, supply and demand of vessel space in the trans-Pacific trade, and some of the more thoughtful strategies and technologies shippers are using in this market.

For more information go to:

http://www.joc.com./

4. Asbestosis World

We can well remember the time when every insurance organisation seemed to have a little sub-section dedicated to the arcane mysteries of Asbestosis claims in the maritime industries. There were lots of trips to New York City for urgent consultation on class-actions. Lloyd's of London pretty nearly expired under the dread of such ultra long tail liability claims.

Our friend Adrian Leonard, the freelance insurance writer, is injecting a little openness into this field by publishing a regular e-mail newsletter on the subject. He reports that early interest is strong, as well it should be with the numbers of insurance companies on the hook for claims. His first issue is out. If you would like a copy of Issue 1, contact him at:

Asbestos.Intelligence@UKGateway.net

5. Reader's Offer: L/C Monitor

During the coming year we will be making many efforts to offer our Readers things we think might be of interest at a discount to the usual price.

Our first such offer is to those who might be interested in the L/C Monitor, a publication devoted to
the issues of documentary credits and the export trade and published in Canada. To give Readers an idea of this publication we will run regular links to published articles.

For the first of these go to:

http://www.lcmonitor.com/bowwave/bwave1.htm

Readers who would like to subscribe to this publication can do so on line using their credit cards. A discount of ten per cent will apply to Bow Wave Readers.

http://www.lcmonitor.com/bowwave/

6. And Finally...

Thanks to on-line humourist Cathie Walker, we ran across the thoughts of Amy Rosenthal whose column--called 15 Megabytes of Fame--is a fine, whimsical effort. We admire her freeness of form and the way she extracts humour from the smallest things.

http://www.mommymommy.com/fmf.html

BOW WAVE is published each week to around 6725 readers in the transport,insurance, shipping and finance industries.

Thanks for reading BOW WAVE