BOW WAVE 138

Fish Head Edition

news and views on trade, insurance and risk

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Wavy Line	sam@wavyline.com
(c)2002 WavyLine.com	Issue No 138 15 Jul 02
Published free of charge to Readers
Editor: Sam Ignarski
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In this issue:

1. Welcome
2. Quarterpoints Column: Just Ask
3. Ciffa Responds to Transport Law Report
4. D Bryant's US Port Security Listing
5. Draft Bimco Standard Bunker Contract
6. And Finally...

1. Welcome

Last week's numerological item on World Cup winners produced a fat virtual post bag from Readers, proving again that item 6 is the most widely read part of Bow Wave. Still we persevere with the other items.

Reader Andy Maisey's message was highly representative of the many:

However since 1900 there are 6 pairs of years for which this works. 5 pairs are 1962/2002, 1966/1998, 1970/1994, 1974/1990, 1978/1986 (1982 can't be paired with itself but it is the pivot around which all the pairs work, by adding and subtracting 4/8/12/16/20 years etc.) but during this time there were only 3 countries who won it at least twice (Brazil 4 times, West Germany twice, Argentina twice) and these are the ones for which the addition works. This means it is quite likely that the total will be 3964. So not quite as amazing as you might think eh?

What of course might be interesting is to do the prediction for the 2006 and that gives you 1958 to complete the pair to total 3964 which means it will be Brazil again if you believe in the numbers (which I don't).

Reader's Letter:

Dear Sirs:

Your recent article about new US port security rules is well-considered. I circulated it (with
attribution) to members of the national transport and trade facilitation committees in Albania, Bosnia, Bulgaria, Croatia, Greece, Macedonia and Romania. Their national bodies participate in SECIPRO, the regional forum of trade facilitation committees in Southeast Europe.

Sincerely,

Glenn Levine
Adjunct Fellow
Center for Strategic & International Studies
Washington, DC
GlennLevine@pobox.com

New Readers this week include:

Associate Professor Dr Stephen Girvin at Singapore NU James McKinnell of the Witty Group
Matti Leivo, Insurance and Logistics Manager at Fortum Oil and Gas Oy Saila Hiisalmi of Oy Baltic Protection Alandia Ab Ports Guru Mike Mundy

News of Readers

Globe trotting Ravi Ravindran, now of Nexlaw Danismanlik in Istanbul, is moving offices in that great city.

Contact him at:

raving@nexlaw.com

Woelk's Theory--"the primary reason why there is not more theft in transport is that there is only a limited number of thieves to go around"--which first reached the world via Bow Wave has recently appeared in an article in the English language Business Weekly The Russia Journal in an opinion piece by John Helmer on the electricity generating companies in Russia.

http://www.russiajournal.com/weekly/index.shtml?tm=5/

A packed issue this week with some (we hope) useful links.

Enjoy.

2. Quarterpoints Column: Just Ask

The editor's Quarterpoints column in Lloyd's List was on why things go wrong in modern companies. The problem with the great centralisers of our times is that they bring extra vulnerability to their operations. When they are wrong things can go very bad. Some will insist that their people disregard the evidence of their eyes as they massage their figures, pump up the share value and maintain nothing is wrong....

Quarterpoints 07 July 2002

Just Ask

Is it me or is this year’s eve of summer not unusually full of ponderables? Share prices have reached a post war nadir. Confidence in the veracity of large global accounting firms has pancaked as firms like Enron and Worldcom have collapsed. It is not so long ago that the brainy men of Arthur Anderson were some of the most admired citizens of the globalised economy.

Now regulators are circling the remaining big four and having a good hard think about what they can next do to prevent further scandals. Who is going to guard the guards?

Since the repercussions of high profile failures are felt in stock markets and economies all over the world (ask Ray Miles of CP Ships), it is no real use for the special pleaders to argue that the Enron kind of skating on thin ice, abetted it is said by the consultancy arm of the auditors, was an American kind of foible, made possible be the accounting rules of the US. It couldn’t happen here, old boy.

It can and it will because the results driven environment of modern global corporate life leads to a certain centralisation of authority and decision making. Those who sit in such positions have vast powers of patronage over suppliers of professional services , are barely accountable to the structures of authority around them and have great influence over their people for good and for ill. Companies which fall into poor mental, ethical and social health under flawed leaders go out with spectacular bangs. A fish starts to rot from the head down.

It is not at all difficult to catch the essence of those in power in many companies. You can sense it in the way the business of daily life is dispatched. Show me an anxious, hard to pin down line executive who is prone to go missing at crucial moments during difficult passages and behind him you will probably find an over centralised company ruled capriciously by an out of touch individual driven not by deep experience and understanding of a market but by an obsessive need to exert control over the organisation.

This kind of Organisation will be mired deep in corporate myths: "passionate about service", "driven by integrity", "people are our assets", which myths will be widely repeated to the outside world in the face of any amount of reality. Great will be the complacency and arrogance in such places. Small will be the fraternity, the respect for others and the openness to new ideas. The fine line of pride which is broadly a good thing is crossed repeatedly into less admirable territories where the lesser qualities of the human spirit within organisations may be found. The grandest example of how badly things can go I can think of comes from the awful example of the communists. The collectivisation of agriculture in Russia, which caused no end of misery to tens of millions of people , began without a single pilot study.

This sense of an organisation gone wrong is also true of really subjective things like style, manners, humour and likeability. Companies which keep on falling adrift of their markets stand no chance of finding out why if those in authority continue to insist that the market simply does not understand. A company which is boorish to its customers is probably boorish in its inner councils and everywhere else.

I have been offered bribes in my career only twice, one from a small company of chancers, the other from a division of a large, privately owned transport company. I was offered a directly personal threat only once, by the London agents of a dodgy Charterer whose freights we had the temerity to arrest for unpaid hire. None of the companies I am thinking of were led by men of organised crime, drug barons or war criminals.

In this time when confidence and trust is such a large issue, the shipping industry may have something to teach the larger global corporates. Here in the dog eat dog world of living by freight, the formalities are comparatively few and the role played by trust quite high. It is not an easy world but it is one where eyes are open and conventions are violated at the peril of those who chance them.

I can be phoned in the morning by a complete stranger from anywhere in the world in our industry and have a reference on the stranger within the day. "Is he all right" I ask and the answer, a mere hesitation or drawing in of breath will tell me all I need to know. A crook, a bully, an economist with the truth, a back stabbing sort of fellow, all have living testimonials which follow them in the day to day interactions of the industry.

The key to the lasting efficacy of this system is its smallness. For all the globalness of shipping and transport, it is a large dispersed village of specialists, most of whom make reasonable livings and no more. The individual natures of the inhabitants of this village are scrutinised by their fellows in great detail with no small intensity. It lies not in the mouth of the banker, the underwriter, the supplier to say he really didn’t know X was a wrong ‘un.

3. Ciffa Responds to Transport Law Report

Tony Young, the Seafreight Chair of the Canadian International Freight Forwarders Association has sent in the organisation's commentary on UNCITRAL's Report of the Working Group on Transport Law's 9th Session, held at New York April 15-26, 2002.

Among the many issues addressed is the paucity of insurance now available for freight forwarders, NVOCs and logistics companies. You can see how the economic and strategic implications of the industry weave in and out of the UNCITRAL report. The notion of a freedom of contract, allowing a contracting out of liability by the parties
does not go down well with small to medium transport intermediaries.

See the commentary at:

http://www.ciffa.com/currentissues/07122002SubTransportCanada.html/

4. D Bryant's US Port Security Listing

For a comprehensive listing of the security conditions at ports of the United States, Readers should access the Port Security page of the Web site of Haight Gardner Holland & Knight. It helps to understand how regulators have progressed to the current approach by scrolling down to the first postings following the attack on the World Trade Centre

http://www.hklaw.com/maritimedev.asp?Subject=portsecurity/

5. Draft Bimco Standard Bunker Contract

From Ms Susan Agerskov we learn that a draft copy of this Contract can be downloaded, free of charge, from the following address:

http://www.bimco.dk/BIMCO%20Documents/StandardBunkerContract.pdf/

6. And Finally...

Many thanks to net humour maven Cathie Walker for these novel word definitions:

1) Arachnoleptic fit (n.) The frantic dance performed just after you've accidentally walked through a spider web.

2) Beelzebug (n.) Satan in the form of a mosquito that gets into your bedroom at 3 in the morning and cannot be cast out.

3) Bozone (n.) The substance surrounding stupid people that stops bright ideas from penetrating. The Bozone layer, unfortunately, shows little sign of breaking down in the near future.

4) Cashtration (n.) The act of buying a house, which renders the subject financially impotent for an indefinite period.

5) Caterpallor (n.) The color you turn after finding half a grub in the fruit you're eating.

6) Decaflon (n.) The grueling event of getting through the day consuming only things that are good for you.

7) Dopelar effect (n.) The tendency of stupid ideas to seem smarter when you come at them rapidly.

8) Extraterrestaurant (n.) An eating place where you feel you've been abducted and experimented upon. Also known as an E-T-ry.

9) Faunacated (adj.) How wildlife ends up when its environment is destroyed. Hence faunacatering (v.), which has made a meal of many species.

10) Foreploy (n.) Any misrepresentation or outright lie about yourself that leads to sex.

11) Grantartica (n.) The cold, isolated place where art companies dwell without funding.

12) Hemaglobe (n.) The bloody state of the world.

13) Intaxication (n.) Euphoria at getting a tax refund, which lasts until you realize it was your money to start with.

14) Kinstirpation (n.) A painful inability to move relatives who come to visit.

15) Lullabuoy (n.) An idea that keeps floating into your head and prevents you from drifting off to sleep

Check out Cathie's amusing site here:

http://www.SillyBuddies.com/

BOW WAVE is published each week to around 7200 Readers in the transport,insurance,shipping and finance industries.

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