BOW WAVE 190

Sour Gherkins Edition

news and views on trade, insurance and risk

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Wavy Line	sam@wavyline.com
(c)2003 WavyLine.com	Issue No 190 14 Jul 03
Published free of charge to Readers
Editor: Sam Ignarski
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In this issue:

1. Welcome
2. State of the Market
3. They're Back
4. Australian Waterfront Productivity Rises
5. ISPS and MTSA
6. And Finally...

1. Welcome

Taken from John Sergeant's Memoir, Give Me Ten Seconds, Pan Books, 2001:

One of the best definitions of news is sometimes attributed to the founder of the Daily Mail, Lord Northcliffe: news is something than someone, somewhere wants to suppress. All the rest is advertising. Politicians are extremely careful to avoid being caught lying, but they are often guilty of the sins of omission.

New Readers this week include:

Readers at FillCargo
Lynda Murray at Ships Electronic Services in Kent Capt. Adrian McCourt Head of Risk Management at Munich Re Underwriting Ltd
Kevin Danes of KRD Consultants in Colchester
Michelle Mattei at Interconex
Ingvar Swenson

News of Readers

Richard Sayer has been appointed the new Chairman of Maritime London, the UK’s maritime services promotional body. Richard Sayer is Chairman of shipbroker Galbraith’s and past senior partner and now consultant to maritime lawyers Ince & Co.

Ove Roessland, who is the Managing director of lifeboat and davit specialist Schat-Harding, has been elected as chairman of ILAMA, the International Lifesaving Appliance Manufacturers' Association.

This is the time of year when a certain slowness in the news becomes manifest. In Britain they call it the silly season, in Germany Saure Gurken Zeit (sour gerkins time). It is thus probable that many of the coming editions of Bow Wave over the months of northern summer will contain items which in more sober minded parts of the year would not really vie for inclusion. A pity but there it is.

Enjoy.

2. State of the Market

Taken from the July 2003 Newsletter of the Surplus Lines Association of Oregon, an admirably wide angled take on the world of insurance come these remarks from Charles Cox, the president of Aldrich & Cox, giving 10 reasons why insurance market is still in a state of chaos:

1. Renewal Costs: There are still double digit increases. 2. Coverage Restrictions: Each renewal involves removal of some element of coverage.
3. Financial Crisis Among Insurers: More and more insurers are being placed on a "death watch" by increasingly active rating agencies.
4. Baseless claim denials: Denials based on policy language having no bearing on the claim at issue - clear evidence that insurers are hoping to discourage policyholders from pursuing any recoveries.
5. Ineffective Middlemen: An alarming number of brokers quickly acquiesce to unreasonable positions taken by insurers. Coverage reductions and premium increases are too often accepted without question, or are explained away by the "continuing insurance crisis".
6. Return to Underwriting: In reality, old risk by risk underwriting is gone. Most underwriting today is by class. The very best risk in an unfavorable class finds coverage hard to come by.
7. Loss Control Again: Insurers are reinstituting inspections and tightening parameters for all inspections. 8. Terrorism Risk Insurance Act: However well intentioned, it has had some unforeseen consequences.
9. Workers’ Comp is still Broken: Eight states recently received a failing grade in a study by the Work Loss Data Institute. The California State Fund is on the brink of financial collapse. 10.Mold Dilemma Continues: Initially not thought to be the next asbestos crisis, more policy holders are being left to deal with mold exclusions and loss exposures that are beyond their means to retain.

Clearly, the insurance market is in chaos. Worse, however, is the fact that the insurance industry is on the verge of obsolescence. Once intended to provide protection against fortuitous risks of loss, a growing number of businesses are in search of alternatives since the insurance industry has shown it is unable to fill that need.

The Associations's Newsletter can be downloaded at:

http://www.slaor.org/uploads/SLAOR%20Newsletter%2007-2003.pdf

3. They're Back

Your editor last heard of the armada of 29000 plastic ducks lost in mid-Pacific during a storm in January 1992 sometime during 1995 when they were headed into the Bering Strait. Crossing on the ice floes of the Arctic Ocean, they are it seems reported en route to New England. The ducks are now white in colour and still marked "the first years". The tireless tracker of these and other flotsam is oceanographer Curtis Ebbesmeyer in Seattle who has used the progress of such recognisable debris to study ocean currents. Now retired, he is often described as the dean of beachcombers and in fact has a rather whimsical website given over to the subject.

http://www.beachcombers.org/

4. Australian Waterfront Productivity Rises

Thanks to the on-line efforts of the editors of the Lloyds ListDCN Zine we learn that the waterfront down under is no longer by any means setting the international standard for stevedoring sloth. The item reads:

"Prices and productivity at Australian box terminals generally improved against their overseas counterparts between 1997 and 2002, according to a new report by the Productivity Commission.

The commission's report, International Benchmarking of Container Stevedoring , shows that major Australian container ports in 2002 are now cheaper "rather than more expensive as used to be the case" than Los Angeles.

On the US east coast trades, Philadelphia has moved from rating equally with Australian ports to being more expensive.

Both Los Angeles and Philadelphia are considerably more expensive than Australia on reefer handling, a trend repeated around the world.

In Europe, Australian ports have moved from being more costly in 1997 to being on a pricing par with Hamburg and Tilbury, and they are cheaper than both for reefers.

Australian reefer charges are much lower than the southeast Asian ports of Singapore and Port Kelang. For dry cargo, however, Singapore remains cheaper "though not by as much as 1997.

The price gap with Port Kelang, however, has opened considerably.

Australian terminals are still much more expensive than Busan, and cheaper than the neighbouring northeast Asian port of Nagoya though the gap has closed since 1997. The cost of handling reefers at Busan and Nagoya is much higher than in Australia.

The commission says that some of the gains are a result of more 40-ft equipment being handled in Australia, which reduces the per 20-ft cost rating.

The shift in exchange rates also had a major impact on the cost comparison with US ports, accounting for half of the increase of Los Angeles over Australian ports. But even allowing for the dollar factor, the price gap in Australia's favour is still considerable.The gains in crane productivity on overseas counterparts were marked, but not as impressive as the gains in cost.

In an assessment of port pairs around the world, Australia gained in 18, but lost in 11, where productivity pulled further away from Australia during the 1997-2002 period.

A sample survey of net crane rate at Sydney showed the port closing the gap on Los Angeles, Philadelphia, Hamburg, Nagoya and Busan. However, Sydney pulled ahead of only one port in the period, Tilbury.Singapore and Port Kelang actually increased their lead of 1997."

Read the Commission's 91 Page Report in Full at:

http://www.pc.gov.au/research/commres/stevedoring/stevedoring.pdf

5. ISPS and MTSA

We received on Friday last a special edition of Maritime Items--the regular legal and regulatory e-zine produced by Dennis L. Bryant of the Washington DC Lawyers Haight Gardner Holland & Knight.

It reads as follows:

Foreign Compliance with U.S. Maritime Security Requirements

The Maritime Transportation Security Act (MTSA), adopted by the U.S. Congress, unfortunately is not fully consistent with the international maritime security regulations adopted as amendments to the International Convention for the Safety of Life at Sea (SOLAS Convention). For the most part, the international requirements may be found in the International Ship and Port Facility Security (ISPS) Code. The regulations recently issued by the U.S. Coast Guard largely adopt and implement the international provisions, but are silent on various provisions in the MTSA. Since the liability of a ship owner or operator for a transportation security incident that may occur in the United States will be judged based upon compliance with both the applicable U.S. Coast Guard regulations and the applicable federal statutes, it is recommended that owners and operators of ships calling at U.S. ports carefully consider the guidance found in Foreign Compliance with U.S. Maritime Security Requirements

http://www.hklaw.com/Publications/Newsletters.asp?ID=385

6. And Finally...

Many thanks to Trevor Jones for these tips:

25 THINGS YOU SHOULD HAVE LEARNED BY MIDDLE AGE

1. If you're too open-minded, your brains will fall out. 2. Don't worry about what people think; they don't do it very often. 3. Going to church doesn't make you a Christian any more than standing in a garage makes you a car.
4. It ain't the jeans that make your butt look fat. 5. Artificial intelligence is no match for natural stupidity. 6. My idea of housework is to sweep the room with a glance. 7. Not one shred of evidence supports the notion that life is serious. 8. It is easier to get forgiveness than permission. 9. For every action, there is an equal and opposite government program. 10. If you look like your passport picture, you probably need the trip. 11. Bills travel through the mail at twice the speed of checks. 12. A conscience is what hurts when all of your other parts feel so good. 13. Eat well, stay fit, die anyway.
14. Men are from earth. Women are from earth. Deal with it. 15. No man has ever been shot while doing the dishes. 16. A balanced diet is a cookie in each hand.
17. Middle age is when broadness of the mind and narrowness of the waist change places.
18. Opportunities always look bigger going than coming. 19. Junk is something you've kept for years and throw away three weeks before you need it.
20. There is always one more imbecile than you counted on. 21. Experience is a wonderful thing. It enables you to recognize a mistake when you make it again.
22. By the time you can make ends meet, they move the ends. 23. Thou shalt not weigh more than thy refrigerator. 24. Someone who thinks logically provides a nice contrast to the real world. 25. If you must choose between two evils, pick the one you've never tried before.

PS:-

Way of the World

We are still struggling to make sense of this story received by courtesy of Barbara Jennings which describes a strange innovation using many new technologies.

Fragments of living rat brain are used to control the scribbling of a robot arm; the rat brain is in USA, the robot is in Australia.

Read all about it:

http://www.gatech.edu/news-room/release.php?id=160

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