BOW WAVE 175

Paperless Trade Edition

news and views on trade, insurance and risk

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Wavy Line	sam@wavyline.com
(c)2003 WavyLine.com	Issue No 175 31 Mar 03
Published free of charge to Readers
Editor: Sam Ignarski
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In this issue:

1. Welcome
2. Wither the Electronic Bill of Lading?
3. The Logistician
4. Where Do Stevedores Go to Get Training?
5. Swiss Re Building
6. And Finally...

1. Welcome

Many Readers wrote in to point out that 1921, the date attributed to the Wilfrid Owen poem Dulce et Decorum Est could not be right as the poet had died in 1918. Whenever we can we try to give the date of publication and like all many things in this world even great poetry is recognised for what it is later than you might think likely.

Oh, life is a glorious cycle of song,
A medley of extemporanea;
And love is a thing that can never go wrong,
and I am Marie of Roumania.

Dorothy Parker (1937)

New Readers this week include:

Don McLellan
John Flynn
David Barnett
Saila Hiirsalmi of Gard
Andy Macrow of the West of England
B Glicksman of Nordisk in Norway
Arbitrator Jonathan Lyne
Nick Graydon of Clyde and Co
Paul Herring of Ince and Co

News of Readers

Graham Edmiston has joined Hill Taylor Dickinson as a consultant

Contact him at:

Graham.Edmiston@htd-london.com

Dorothy Lim has left Bolero

Contact her at:

dorothy_lim@hotmail.com

This week your Editor the annual dinner of the London Maritime Arbitrators Association courtesy of Hew Dundas. There after speeches extolling London as the centre of dispute resolution, Mr Moss reminded his audience how the market wanted swifter and less costly services.

Enjoy.

2. Wither the Electronic Bill of Lading?

Your editor's Quarterpoints column in Lloyd's List addressed the less than boundless progress of
the campaign to render international trade paperless:-

Patient Revolution

What can we say in March 2003 about the campaign to move paper based international trade to computer based modern substitutes? This campaign, which has been an apple in the innovators’ eyes ever since the 1980s when the SeaDoc Registery was launched by Chase
International and then retired for lack of support. The focus has been upon the legally complex bill of lading. Since the late 1990s, three approaches have been actively competing for the favour of the market. These are the TT Club and Swift sponsored Bolero
Scheme, the Canadian based CCEWeb and Trade Card, sponsored by General Electric.

We can say progress has been rather slow. Although the technological barriers to reforming this high redoubt of traditional paper bureaucracy have been tackled, the take up has not been dramatic. Why ?

The first reasons seems to derive from to the
conservatism of international trade. The processes of international trade have evolved over time, are
imperfectly understood by traders and service
providers and are changed, when they are changed at all, at a pace which can only be described as
plodding. Even though laws have been changed to
accommodate computer held data as valid evidence and the challenges of the special quality of bill of lading negotiability has been addressed by the
parties in various ways the market players themselves are not moving beating a path to the door of the
providers.

This may derive from the sheer complexity of
international trade. As the doctrines of quality management and the requirements of process analysis were applied in full rigour to international trade it began to dawn on the industry that it customarily worked with over simplifications. In truth in the world of international trade, the intersecting worlds of manufacturing, shipping, trading, finance,
insurance and customs hardly intersected at all and each of the major branches of international trade employ specialists whose role includes the
harmonisation of process with the requirements of other parts of the chain. Freight Forwarders exist to make simple to their customers the complexity of international trade processes. Banks employ letter of credit clerks who do the same for customers. Traders employ shipping experts to deal with the complexities of actually moving the goods or commodities concerned. Rather as in the City of London itself which in fact consists of a number of self sufficient cities for the sectors of insurance, shipping, banking and stock trading which hardly intermingle, the mansion of
international trade has many houses surrounded by well maintained fences. It is doubtful whether any of the current approaches have done much to meld this
separateness. Mostly the sheer complexity of the approaches has served to repel.

The third reason may be the design of the approaches. Many voices have criticized the business models
adopted in the recent age by electronic reformers. In a world going through strong consolidation in any event, which business will pay a single centralised third party a transactional toll simply to carry on business with its customers, 20 per cent of which accounts for 80 per cent of revenue. Which player in international trade is comfortable as it were paying a small fee or tax to the owner of facilities each time it transacts business with its customers? Wasn’t this the single most delusional thought of the dot.com boom era through which we all passed?

The fourth reason may revolve around the price of technology at current states of evolution and the likely price which will be paid by users in the
future. Secure transmission of bills of lading and other parts of the trade transaction (a sandwich of documents which may run into hundreds per trade) is certainly something to be valued by the parties, but how much extra will they be paying for the efficient encryption of their messages? And how much cost will the entire system bear? There are said to be 5
million letters of credit negotiated each year, a large but not astounding base volume.

The fifth reason concerns the need for standards. The so-called Next Generation of inter bank standards will adopt XML, allowing a variety of computer systems to speak to another variety. Presumably the importers and exporters will follow suit, as will their sub contractors in shipping and transport. Valuable work which will one day surely bear fruit.

But for now it seems to me that the revolution of international trade is a project which to happen will need the best part of another decade and the
imagination and innovation of a younger generation of practitioners, the sort of people who use computers as naturally and fluently as others nowadays use paper.

(26MAR03)

3. The Logistician

About Logistics, the internet guide moderated by Jeff Ashcroft, is featuring the mainly American military logistics sites this week. In between we found this description of the breed:

"Logisticians are a sad and embittered race of men who are very much in demand in war, and who sink resentfully into obscurity in peace. They deal only in facts, but must work for men who merchant in theories. They emerge during war because war is very much a fact. They disappear in peace because peace is mostly theory. The people who merchant in theories, and who employ logisticians in war and ignore them in peace, are generals.

Generals are a happily blessed race who radiate confidence and power. They feed only on ambrosia and drink only nectar. In peace, they stride confidently and can invade a world simply by sweeping their hands grandly over a map, pointing their fingers decisively up terrain corridors, and blocking defiles and obstacles with the sides of their hands. In war, they must stride more slowly because each general has a logistician riding on his back and he knows that, at any moment, the logistician may lean forward and whisper: "No, you can't do that." Generals fear logisticians in war and in peace, generals try to forget logisticians.

Romping along beside generals are strategists and tacticians. Logisticians despise strategists and tacticians. Strategists and tacticians do not know about logisticians until they grow to become generals--which they usually do.

Sometimes a logistician becomes a general. If he does, he must associate with generals whom he hates; he has a retinue of strategists and tacticians whom he despises; and, on his back, is a logistician whom he fears. This is why logisticians who become generals always have ulcers and cannot eat their ambrosia."

See the site at:

http://logistics.about.com/cs/military/index.htm

4. Where Do Stevedores Go to Get Training?

We received a number of answers from Readers to our Question:

From Dr.Ravi K. Sishta.
Master Mariner.

Based on three decades of working with stevedores and now defending them with their claims, I can easily answer this question by saying that stevedores receive their training on-board ships they stevedore. No doubt their basic skills remain escaping the dangers of free falling loads. Having said so, I'd like to add that ship owners may like their gear designers to sponsor training schools in addition to adding high-tech cut-off switches and alarms.

From Patrick Bond,Director, Marine Response Ltd

Most Stevedores are equipped from birth with the ability to lift,handle, stow and discharge a vast selection of commodities, using an almost limitless range of equipment. On the rare occasions when training is needed, the marine transport industry provides sophisticated simulators known as 'ships'. This gives the stevedore the opportunity to experience dropping, breaking or poorly stowing cargo, with perhaps the added spice of abusing equipment and killing or maiming crew or colleagues, with little or no fear of repercussions.
(just joking!)

From Tom Scherting, Risk Manager, Stevedoring Services of America

There is a pretty comprehensive job training process when someone becomes tenured enough to start operating handling equipment. The West Coast Employer's Group have a computerized crane simulator - very similar to the flight simulators the airlines use. It is pretty incredible. I spent part of a day in it. It is an exact replica of the crane and the seat ("cab") is on a hydraulic system so that it "moves" as you pick up or release the container. Of course, with my background, I had to see if I could knock a stack of containers from the ship to the water. The machine wasn't programmed for that! The system also provides the operator/trainee a printout of his results on a move by move basis.

From Paul Crompton, Director, CNA

Here in Canada training of stevedores is carried out at the larger ports by the Maritime Employers Associations which provides both classroom and on-site training. Classroom training on handling equipment is both theoretical and involves the use of simulators. After this the students are let loose on real equipment under supervision.

From Phil Parry, MD, Spinnaker

Michael Grey wrote an article on a stevedoring training course in the UK run by Richard Brough in June 2002. Richard is Managing Director of Northern Cargo Services.
email him at:
rbrough@ncs-hull.co.uk

5. Swiss Re Building

Your editor has a view of the new Swiss Re Building from home. An improbable and striking building erected on the grounds of the former Baltic Exchange. There is really nothing like it in London.

The current bear market for shares and the scale of losses lead obervers to ask: will the company suffer from the handsome new building syndrome, as did its near-neighbour in Lime Street? This syndrome consists of a certain economic reversal of fortune the moment the new edifice is opened for business.

http://www.fosterandpartners.com/internetsite/html/Project.asp?JobNo=1004

6. And Finally.....

Many thanks to Roger Wormersley for these Brain Cramps, moments when cogitation and pronunciation fail to synchronise:-

"If I was a millionaire I would go to third world countries and bathe their children, because I am a mercenary." ....... --Melissa (from Joe Millionaire)

Question: If you could live forever, would you and why? Answer: "I would not live forever, because we should not live forever, because if we were supposed to live forever, then we would live forever, but we cannot live forever, which is why I would not live forever."
--Miss Alabama in the 1994 Miss USA contest.

"Whenever I watch TV and see those poor starving kids all over the world, I can't help but cry. I mean I'd love to be skinny like that, but not with all those flies and death and stuff."
--Mariah Carey

"Smoking kills. If you're killed, you've lost a very important part of your life,"
--Brooke Shields, during an interview to become Spokesperson for federal anti-smoking campaign.

"I've never had major knee surgery on any other part of my body," --Winston Bennett, University of Kentucky basketball forward.

"Outside of the killings, Washington has one of the lowest crime rates in the country"
--Mayor Marion Barry, Washington, DC.

"I'm not going to have some reporters pawing through our papers. We are the president."
--Hillary Clinton commenting on the release of subpoenaed documents

"That lowdown scoundrel deserves to be kicked to death by a jackass, and I'm just the one to do it,"
--A congressional candidate in Texas.

"Half this game is ninety percent mental."
--Philadelphia Phillies manager,Danny Ozark

"It isn't pollution that's harming the environment. It's the impurities in our air and water that are doing it." --Al Gore, Vice President

"I love California. I practically grew up in Phoenix." --Dan Quayle

" It's no exaggeration to say that the undecideds could go one way or another"
--George Bush, US President

"We've got to pause and ask ourselves: How much clean air do we need?"
--Lee Iacocca

"I was provided with additional input that was radically different from the truth. I assisted in furthering that version."
--Colonel Oliver North, from his Iran-Contra testimony.

"The word "genius" isn't applicable in football. A genius is a guy like Norman Einstein."
--Joe Theisman, NFL football quarterback & Sports analyst.

"We don't necessarily discriminate. We simply exclude certain types of people."
--Colonel Gerald Wellman, ROTC Instructor.

"If we don't succeed, we run the risk of failure." --Bill Clinton, President

"We are ready for an unforeseen event that may or may not occur."
--Al Gore,VP

>"Traditionally, most of Australia's imports come from overseas."
--Keppel Enderbery

"Your food stamps will be stopped effective March 1992 because we received notice that you passed away. May God bless you. You may reapply if there is a change in your circumstances." --Department of Social Services, Greenville South Carolina

"If somebody has a bad heart, they can plug this jack in at night as they go to bed and it will monitor their heart throughout the night. And the next morning, when they wake up dead, there'll be a record."
--Mark S. Fowler,FCC Chairman

PS from D Cheslin:

A quote from Sky News

"Umm Qasr is a city similar to Southampton," UK defence minister Geoff Hoon said in The Commons yesterday.

"He's either never been to Southampton, or he's never been to Umm Qasr" says a British Squaddie patrolling Umm Qasr.

Another soldier added: "There's no beer, no prostitutes and people are shooting at us. It's more like Portsmouth."

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

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