BOW WAVE 197

Dunelm Edition (2)

news and views on trade, insurance and risk

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Wavy Line	sam@wavyline.com
(c)2003 WavyLine.com	Issue No 197 01 Sep 03
Published free of charge to Readers
Editor: Sam Ignarski
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In this issue:

1. Welcome
2. Floating warehouses cut costs
3. The end of the line - for some
4. Quietly shipping away
5. One big one or two little ones
6. And Finally...

1. Welcome

Responding to last week's item on 'environmental time bombs', several readers wrote to say that tankers such as Prestige should be left alone since the oil cargo still on board will have solidified. Your editor does not dispute this but he does worry that European politicians and bureaucrats are clearly unconvinced. They need to be seen to be doing something even if what they do is to ask (tell?) the industry to do the impossible and to hell with the cost. Is the industry really doing enough to fight its corner?

Seatrade London - support it if you care

London is one of the world's leading maritime centres yet it has long lacked a showcase event whereby its resident skills could be presented. With the arrival of a new waterside conference and exhibition centre in London's Docklands, the maritime publishing and exhibitions specialist Seatrade has taken the plunge by organising a whole series of events under the umbrella of Maritime London. Commencing 16 September and running for three days, there should be something to interest everyone. If you are based in London and want to help ensure that this is not a one-off event, register now. If you're not a Londoner, come along anyway. Every person through the turnstiles will be important and the hospitality will be excellent.

PR for the event is being handled by Merlin's John Guy and he writes to say:

"Insurance is a large part of what Maritime London does well. On the afternoon of Tuesday 16th September, there will be a special insurance-focussed session of the Money & Ships Conference, lynchpin of the whole programme.

Provided you can drag yourself away from the trade show floor and the numerous social and other events around ExCel, you can attend a session on consolidation in the insurance market and what bargaining power there remains to the insurance buyer. Peter Ahlas, of HSBC Insurance, will be debating that with luminaries of the P&I and hull world. Have your say."

Check out Maritime London on

http://bwww.seatrade-london.com.

Meanwhile Dunelm is assisting the Port of Ningbo in the organisation of a seminar for shippers and forwarders to be held during Maritime London. Less high profile than its neighbour Shanghai, Ningbo is determined to steal some of its limelight and is to be applauded for taking such an initiative. More information can be obtained by e-mailing
davidcheslin@dunelmpr.co.uk.

More about Dunelm Public Relations can be found at

http://www.dunelmpr.co.uk.

News about Readers

Any readers living or doing business in Russia might want to get in touch with Tim Ockwell, a new subscriber to Bow Wave and a partner with EuroPolicy, a general insurance company targeting the expatriate market in Moscow and some regions of the Russian Federation. Tim explains:

"We look after the insurance problems of foreign owned and/or managed (British, German, French, American etc) SMEs and their expatriate employees. Our products range from property (fire, theft etc) and business interruption, general third party liability and import/export cargo coverages for the corporate entity to international medical expenses, home buildings and contents, motor car and similar personal coverages for the individual. We also look after the insurance needs of our parent company and other selected Russian businesses."

Contact Tim Ockwell at:

tim@europolicy.ru.

New Readers this week include:

Readers over at Murray Fenton (India) Surveyors, in Jamnagar Attornies at Law Ph.Christodoulou in Greece
Readers in the Gent offices of Langlois & Co.
Stephanie Brinegar at Richmond University in Virginia Swiss Trade Banker Walter Huber

2. Floating warehouses cut costs

How much cargo is rushed from A to B and then sits in a warehouse for days if not weeks? In Europe, some shortsea carriers such as Geest North Sea Line <http://www.geest.com/> are promoting a 'floating warehouse' concept whereby door-to-door transit times take second place to a system geared to ensuring that cargo leaves the shipper's premises when the shipper wishes and arrives when the customer needs it.

For the shipper, eager to reduce costs, the floating warehouse concept enables him to load containers almost straight from the production line, thus reducing the need to provide pre-shipment warehouse capacity. Similarly, the consignee can save on warehouse costs by putting off delivery until the product is needed.

The carrier has much more freedom to decide when to move the loaded containers and so can make considerable savings. Rather than ship the container on a busy mid-week vessel, he can, for example, delay the cargo and take advantage of a less heavily booked weekend sailing. He can also consider barge and rail as alternatives to road transport and perhaps make additional savings by allowing these subcontractors similar flexibility to use off-peak trains or barges.

Should the shipper suddenly decide that a particular container is required urgently, it is a simple matter to pull it out of the system and fast-track it to its destination.

The carrier of course needs to ensure that savings are not being wiped out by increased container demurrage costs related to lower utilisation of his container fleet and/or terminal storage charges, but with the correct management structure, such risks can be monitored.

This appears to be a win-win transportation system for shippers and shortsea carriers.

3. The end of the line - for some

This month has seen the arrival in Germany of the cruise liner Norway <http://www.ncl.com/fleet/05/norway.htm>, still fondly remembered as the mighty France, pride of the French Merchant Navy despite having left the French registry over 20 years ago. Built in 1962, she suffered a massive boiler-room explosion <http://www.ntsb.gov/Pressrel/2003/030609a.htm> earlier this year in Miami, a disaster that took the lives of seven of her crew.

Norway's owners have still to decide what to do with her. The options include replacing the current steam turbine plant with more economical diesel or diesel-electric propulsion, simply replacing the damaged boiler (and her other boilers too?), or acknowledging defeat and sending her to the scrapyard.

With US lawyers already working on behalf of the families of the bereaved and for those who were badly injured in the blast, the insurance bills are already looking huge. Towing her across the Atlantic will have been expensive too. A 'simple' repair might look tempting but surely having had one 40-year-old boiler plate explode, all the vessel's boilers and steam pipelines would have to be replaced to avoid the slightest chance of a similar incident in the future?

Does re-engaging a 40-year-old ship make sense when the pay-back time is bound to be relatively short? Who knows? After all, the same owner is currently formulating plans to rebuild the old US-flag United States, also steam-turbined and ten years older than Norway.

There are many who suspect that rebuilding two old ladies will be too much for one company to undertake. Will it be Norway or United States that gets the thumbs down?

4. Quietly shipping away

While this little saga has attracted a lot of media attention, the cruise industry has said goodbye to a number of once-famous old ladies in recent months.

'Union-Castles <http://www.union-castle-line.com/intro.htm> Windsor Castle and Transvaal Castle have both gone to the breakers. Perhaps the most significant ship to slip away unnoticed, however, has been Southern Cross built by Harland & Wolff in 1955. With engines aft, she revolutionised cruise ship design by providing large open-deck areas between the bridge and funnel. Sadly, no-one felt her worthy of preservation, despite the fact that UK developers are supposedly looking for an old passenger ship with London Docks connections to berth near Canary Wharf in East London.

Contrast this with Rotterdam, that grand old lady finally making it back to her home port for incorporation into the port city's booming waterfront developments. One can only hope she has a happier career than two earlier attempts to save old ladies Queen Mary and Oriana, neither of which seem to have been financial successes.

5. One big one or two little ones?

The ordering of new containerships of 7,000 to 8,500 TEU continues apace. One of the reasons for settling at this new 'standard' size appears to be that the designers have pushed the engine builders and propeller builders to the limits of today's technology. To go bigger without sailing into uncharted waters would call for twin engines and twin propellers if speed is not to be sacrificed.

There are many who believe that two engines are better than one. If one engine fails, a big ship can still make quite a good speed on the remaining engine, a fact which should not be lost on insurance underwriters, especially given the high cargo values associated with these giants. However it is unlikely that insurance premium savings could ever offset the higher construction and operational costs associated with two engines.

A side effect of the single propeller approach is that big propellers require deep drafted ships. As containerships get bigger, the drafts increase. This does not appear to worry the shipowners but ports around the world, desperate not to lose out to their competitors, are looking not only at expensive dredging projects but also new berth construction as older terminals cannot easily be dredged down to the depths now being demanded by these big ships.

6. And Finally...

We are probably all familiar by now with the annoying, squiggly lines that appear somewhat censoriously on screen and question our spelling abilities as we tap away at our keyboards. How gratifying, then, to receive the following - a gentle reminder that technology is not always right ...

Eye have a spelling chequer
It came with my pea sea
It plainly marques four my revue
Miss steaks eye kin knot sea.
Eye strike a key and type a word
And weight for it to say
Weather eye am wrong oar write
It shows me strait a weigh.
As soon as a mist ache is maid
It nose bee fore two long
And eye can put the error rite
Its rare lea ever wrong.
Eye have run this poem threw it
I am shore your pleased two no
Its letter perfect awl the weigh
My chequer tolled me sew!

P.S. Weird Words: Killick

An anchor; a leading seaman in the British navy.

Can any Bow Wave readers shed more light on the origins of the word 'killick'? It has been around in its literal sense since the sixteenth century and, initially, usually referred to a rock or big stone that a ship used in lieu of a metal anchor. A fairly modern example is in Jim Davis, by John Masefield: "In the shallow water near the beach, we dropped our killick".

Nobody seems to know where the word comes from, though it has been argued it's from the Irish word "killech" for a wooden anchor (you might think a wooden anchor would uselessly float, but it actually consists of a wooden frame enclosing a rock, an ancient type that's still used in places). The Concise Scots Dictionary, on the other hand, suggests it comes from Scots "gelloch" for the hole in the centre of a pickaxe blade.

The records show the word has been spelled in so many ways that it was clearly a colloquial or slang term that was passed on mainly in speech. It is now pretty much obsolete in British English, other than as a jargon term in the Navy, though it has been known in Australia under the spelling "kellick". A leading hand in the Royal Navy is nicknamed that because his badge of rank has a single small anchor on it.

If anyone knows of the origins of this word or has heard it used in a different context, please drop an email to Bow Wave.

BOW WAVE is published each week to around 8600 Readers in the transport,insurance,shipping and finance industries.

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