BOW WAVE 154

Intelligence Edition

news and views on trade, insurance and risk

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Wavy Line	sam@wavyline.com
(c)2002 WavyLine.com	Issue No 154 04 Nov 02
Published free of charge to Readers
Editor: Sam Ignarski
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In this issue:

1. Welcome
2. Quarterpoints Column: Maritime Security
3. Message from Grand Canary
4. Pilecap
5. Himalaya Clause Case
6. And Finally...

1. Welcome

Another heads up in our long line of anti scammer warnings:

Reader Gary Hartland of QSE warns:

Another 'style' to the 419 approach is cropping up with increasing regularity in my email. These are Invitation To Tender letters for various bits of business in the Gulf State of Qatar, with a price for the application being the scam. My contacts in Qatar advise me the projects don't exist . You may wish to warn your readership.

New Readers this week include:

Saleem Ahmad of the Allianz in Canada
Belgian insurance man Eddy De Baere
Gary Vitalone of brokers Aon
Andrew Stammers of brokers Cooper Gay
Marketing person Tessa Torkington of the Baltic Exchange Neal S. Hales of CP Ships Insurance and Claims Services K.J. Antony in Cochin India
Andrew Rosenbaum in Holland
NY lawyer David L. Mazaroli
Consultant C. Lueddeke in Switzerland
Alexander Fedorov of Alex Marine Ltd.

News of Readers

Bruce Farthing writes

You--and your readers--may like to know that following your mention of Michael Farlie in one of your issues earlier this year I was able to contact him in Vancouver. We knew each other and worked together on various occasions when he was Director of the HK Shipowners Association and I was running Intercargo.

As a result of this contact Michael was able to suggest that an invitation should be sent to the Lord Mayor of London to address a Dinner to be hosted by the British Columbia Chamber of Shipping during his visit in the Autumn to North America. The Lord Mayor was delighted to accept and the event duly took place in Vancouver on the 18th October.

The Lord Mayor was supported by Maritime London's Executive Director , Tony Funnell and several other members . In his speech and on other occasions during his short visit the Lord Mayor promoted Maritime London's range of
services to the North American shipping community .A brief report is to be found on Maritime London's Web Site and the full text of the Lord Mayor's speech can be downloaded. This is the first occasion in my experience when a Lord Mayor has devoted a complete speech during an overseas visit to specifically maritime issues. As President of Maritime London I am grateful to Bow Wave for facilitating this.

Bow Wave readers may also like to know of another initiative sponsored by it namely the Seatrade London International Maritime Convention to be held at the Excel Centre in London's Docklands in September 2003 . This will be a world class event and provide a shop window for ALL the maritime services and expertise available not only in London but in the UK as a whole.

Maritime London's Web site is at:-

http://www.maritimelondon.com

Readers Wants

Neil Abbott, who is a surveyor in New Zealand is looking for infomation:-

I am doing some research into the deceleration of containers as they land and the g-forces their cargoes will be subjected to for risk management purposes. I am sure many of your readers will have heard the catch-cry "the container must have been dropped" when dealing with cargo damage claims.

I'd be interested to hear from anyone who has data or an interest in this subject. My physics is still somewhat at below "A" level so I have some trouble dealing with the figures and translating them into something meaningful. A complete mathematical treatise might be useful but I'd prefer some empirical data!

Can anyone tell me the sort of speeds a loaded container should be travelling at as it lands, so as not to be considered "abnormal"?

I'd considered that many portainer cranes now have highly automated systems. Do they have automatically controlled landing speeds? I then go on to think that the pressure is on for the number of movements per hour to increase. Raising the final landing speed would allow such an increase (the beautifully gentle landing which does not upset the cargo might take a long time!). Someone then should be setting limits - what are they?

I also recall that gas turbine pods have shock mounts inside designed to absorb, I think, up to 3g of force. Is this a low figure for general cargoes?

contact him at:

neil.abbott@manumarine.com

Here in Britain, the clocks have gone back and we see the gathering gloom of winter at half past four in the afternoon.

But neither strong winds nor incessant rain deter the business at hand.

Enjoy.

2. Quarterpoints Column: Maritime Security

Your editor's latest column in Lloyd's List relates to certain reservations about the coming changes in the security regimes applicable to supply chains in future:

THESE past few months I have been attending sessions on shipping and security, a subject which has us all rather in thrall these days.
A few times I have listened to representations from government officials as ideas are floated in the aftermath of American political determination to crack down on terrorism and in preparation for the legislative phase at IMO where a diplomatic conference propelled by the American agenda is set to hurry new rules into being with a minimum of delay.

This means that the usual more lengthy timeline has been shortened so as to bring into being security measures applying to cargo, ships, ports and crew that will enter into force by 2004 or even 2003. It now seems much clearer that shipping in general and container shipping in particular is a strong constituent part of the open society. Unlocking the economic potential of developing societies, the container has made success possible up and down the coasts and estuaries of east and southeast Asia to name but a few places.

In a way, the absence or presence of containerised infrastructure tells you a lot about the state of the country or region concerned. If your economy is one of the remaining ones which gets by using breakbulk techniques for cargo handling, you probably have a long way to go before prosperity is just around the corner.

But the very openness of containerised systems and their role in the globalised rather borderless modern economy is also, it has been realised, a hallmark of vulnerability.

It seems to me that some of the measures which are being urged for adoption may well provide, in the words of Aline De Bievre, the mere illusion of security rather than security itself. This is the direct consequence of the sheer scale and ramification of international shipping and transport.The idea of inspection, attempting to find the terrorist's needle in the haystack of the 240m teu worth of port movements reported in the world last year does not stand up to too much contemplation.
Even in a system as closed as Saudi Arabia's was in the post oil boom development years, the idea of containers which could be opened on all four sides for inspection remained little more than that.

Today, the numbers game in the major ports makes inspection without advance intelligence nearly as useless as the plastic buckets full of small pocket knives which are taken from passengers at the airports of the world.

This is no doubt the reason why the US government has espoused the idea of advance notification of containers about to be loaded on #ships in faraway places.The data produced will give the analysts something to work on. The analysts for their parts will be looking for patterns and single exceptions. From the mountains of data generated by any new system of cargo declaration, search software not unlike the software used by the Google search engine can look for the slight indicators that something is amiss.

The example I have heard of the kind of cargo movement which might trouble a scenario planner begins its voyage in Jordan inside a road tanker running UN oil sanctions. It goes to Aqaba, is packed in with other cargo in a groupage container and consigned on a feeder ship to Algeciras. There it is transhipped to Virginia from whence it proceeds by rail to the Midwest where it is detonated or unleashed on the civil population of some Northern manufacturing city like Detroit.

In some senses, the measures being adopted by US customs and other security agencies in the US have their origins in the workings of the Department of Defence, itself a formidable generator of cargo volumes and itself needing to ensure secure corridors for the flows of its non-lethal cargoes, which are carried on container ships just like our own CD-Roms and MP3 players.

The role that tracking and supply chain management techniques play in logistics in the US Forces are per force being grafted onto the main stream civilian cargoes of the world.

The greater the oversight over the major supply chains, the better the security? Well maybe. Undoubtedly the soft underbelly of the freight forwarding, logistics and land transport industries will take a great deal more effort to quantify than the sea leg of any journey.

The desire for greater transparency of ownership of ships has also become a desirable goal in Washington, perhaps in light of the frustrating search for ships engaged in no good. The fragmentation of interests in a modern collection of one ship companies is quite a spread to contemplate.As understandable is the desire to know precisely who is behind the brass plate, we may wonder whether the drive to bring the beneficial ownership of ships into the light, after 50 years of foc fog and obscurity will be worth the candle.

The shadow side of shipping, the part which rubs shoulders with organised crime, drug runners and international terrorism is unlikely to risk exposure via the mechanism of greater transparency of registration.

It might be a better idea for the US federal government to establish and maintain an in-house or tied "shipping brokerage", a network dedicated to keeping eyes and ears open for the wrong 'uns in the industry. Winnowing out the important signs of danger may well depend on the computerised crunching of data and numbers drawn from billions of variables. But the need for human intelligence in and around the movement of cargo has never been greater.

3. Message from Grand Canary

Our (cruel) friend in the islands, Correspondent Ida Stier writes:

Hi Sam,

How are things going at your end? Winter time knocking at the door?

Maybe the site below would be of interest to you and your Readers. It relates to a luxury yacht of one our friends -he organises special outings at sea by day or many days.

The site will be soon be translated into English and German although it easy to get the general the message.

Got to the site at:

http://www.divi-divi.info

4. Pilecap

We have recently received word from this company, based in Kansas City, Kansas relating to its services. The company's website has a series of project photographs illustrating ways of "repairing wood, steel, concrete, and H-piles with ZERO downtime"

See the site at:

http://www.pilecapinc.com/home.htm

5. Himalaya Clause Case

Taken from the tireless Mike Ryan's Cargo Newsletter 40

RAILROAD DERAILED IN BID FOR HIMALAYA . . .

The Eleventh Circuit Court of Appeals held that an inland rail carrier was not entitled to limit its liability for cargo damage under the ocean carrier’s bill of lading because there was no privity in contract between the rail carrier and the ocean carrier.

Cargo interests brought suit for damage to machinery which occurred due to a train wreck while the cargo was being transported from the discharge port of the inland place of destination. The district court decided that the rail carrier could limit its liability on the basis of the Himalaya Clause in the ocean carrier's bill of lading. The circuit court reversed the district court finding that the cargo consignee was not a party to the ocean carrier's bill of lading and was not bound by its terms. The circuit court also ruled that while the cargo consignee was a party to a bill of lading issued by an NVOCC, the rail carrier could not invoke the protections of that bill of lading since it was not a "clearly intended beneficiary" of the NVOCC's bill's Himalaya Clause.

The court found that the NVOCC's use of the FIATA Multimodal Transport Bill of Lading ("FBL") form was indicative that the NVOCC was acting as a principal and not merely as an agent for the shipper. That conclusion, said the court, was reinforced by the fact that the ocean carrier issued a separate bill of lading which listed the NVOCC, and not the actual shipper, as the party with whom the ocean carrier was contracting.

The court cited the seminal American case on Himalaya clauses. Robert V. Herd & CO. v. Krawill Machine Corp., 359 U.S. 297 (1958) for the rule that "contracts purporting to grant . . . limitation of liability must be strictly construed and limited to their intended beneficiaries". The court held that the fact that the rail carrier had not been engaged directly by the NVOCC, but rather by the ocean carrier, clearly excluded the rail carrier as one of the intended beneficiaries of the NVOCC's Himalaya clause and that privity of contract was required where the category term being interpreted in the clause is "relational" such as "agent" "servant" or "independent contractor".

For a copy of the newsletter contact Mike at:

mryan@hillbetts.com

6. And Finally.....

Our psychologically acute Reader Bill Fitzhugh has written recently:

"I've always had a very soft spot for Wedgie Benn (Anthony Wedgewood Benn--now retired left of centre Labour politician in Britain-ed). As you will know he has become a close friend of Edward Heath, not because they share a single political view but because they are both committed parliamentarians.

W-B has been gathering new fame recently as a result of his sold out lecture tours. I'm not surprised. Here are couple of extracts:

The first is:

"Five questions we should ask any powerful person: What power have you got? Where did you get it from? In whose interests do you use it? To whom are you accountable? How do we get rid of you?"

And the second:

"The BBC had a rowing competition with the Japanese and lost. So John Birt set up a working party to try and find out why. They found that while the Japanese had eight people rowing and one steering, the BBC had one rowing and eight steering. The working party decided to employ consultants to devise a solution. They decided that what the BBC really needed was three steering managers, three deputy steering managers and a director of steering services. The rower, meanwhile, should be made to row harder. When they faced the Japanese and lost again, the director of steering services decided to sack the rower, sell the boat and give himself a pay rise."

BOW WAVE is published each week to around 7550 Readers in the transport,insurance,shipping and finance industries.

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