BOW WAVE 241

Reportorial Edition

news and views on trade, insurance and risk

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Wavy Line	sam@wavyline.com
(c)2004 WavyLine.com	Issue No 241 04 Jul 04
Published free of charge to Readers
Editor: Sam Ignarski
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In this issue:

1. Welcome
2. Vacancy for a Senior Marine Actuary
3. USCG Enforcement of New Security Requirements
4. The Month of June in Marine
5. ISPS Thumbs Up from Mumbai
6. And Finally...

1. Welcome

Memory is the treasury and guardian of all things. [Lat., Memoria est thesaurus omnium rerum e custos.] - Cicero (Marcus Tullius Cicero), De Oratore (I, 5)

New Readers this week include:

Marine engineering superintendentBarry Longyear.
Surveyor Robert Lugo of Saybolt Kenya in Mombasa
Craig Cunningham of Bowman Gilfillan
Travel Consultant Claire Kessock-Philip of Goodace & Townsend Travel
Lawyer Jenny Mcintosh of Garlicke Bousefield in South Africa
Paul Van Dyck, deputy editor of the MotorShip
John Gillibrand and Alan Shuckburgh of the Venture Mngmt Group
Ramses Owens of the Mossfon Trust Corp in Panama
Shipping and Logistics Correspondent Michael Hollmann
Peter Kidman of LISCR (UK)
Marine Consultant John Daniels of the Dynamic Positioning Centre
Colin Kerby, Principle Surveyor, SCUA

News of Readers

James Wannell has left Naxco for pastures new.

Contact him at:-

jnw2@wanadoo.fr

Readers Write:

Underwriting Manager Mark Jeeves writes:-

I would like to advise that we have recruited a new Underwriter from the TT Club, Ian Edwards Ian was the UK Development Executive at the TT Club and he joins Allianz Marine and Aviation on 1st July as an Underwriter within the Transport Liability Department. I am naturally delighted to have Ian join us.

His contact are:-

Ian.Edwards@ma.allianz.com

A rather reportorial edition this week, which marks one of the more important deadlines in the year's marine calendar. Your editor's charmed life continued during the week with a day at Henley Regatta courtesy of Craig Kersey-the financial risk consultant and the hosts of Det Norske Veritas who held a sunny reception onboard the Golden Hinde in Southwark.

Enjoy.

2. Vacancy for a Senior Marine Actuary

Walter Mellert the marine underwriting guru for Swiss Re in Zurich has written in with a vacancy for a Senior Marine Actuary. He says they know of no such animal anywhere, but they are willing to train a suitable candidate to become the first of a new species. The job would fall within the Business Group Property / Casualty (BGPC) Chief Underwriting Office, Group Product Management.

Here is the profile of the position:-

Your Job

Data-mine and analyze the global marine business at large and Swiss Re&'s marine book in particular. Create a virtual marine profit center with the purpose of pin-pointing threats and opportunities in respect of individual regions, sublines, types of business, supplying parameters, recommendations and training to the underwriting community.

Bring actuarial know-how to the so far "actuarially untouched" marine field, creatively identifying possible areas for actuarial analysis and modeling and convince underwriters to employ these models in their daily work with a view to achieving Group strategic goals.

Develop, review, maintain marine pricing tools, review cost/loading concepts and train underwriters in their use. Review, improve and maintain marine threat scenario methodology.
Be a knowledgeable sparring partner for our non-life actuaries explaining marine specific peculiarities on a par level. Participate and advise in planning and closing / reserving plausibility checks. Organize and prepare reports on renewals, reserving levels and general product performance and recommend measures to optimally manage market cycles.

Your Profile

Graduate with excellent analytical / actuarial abilities, member of an internationally recognized actuarial association, eloquent in English (other languages would be an asset), at least 5 yrs of practical actuarial, non-life experience, international exposure and outlook, curious and imaginative, open minded and eager to explore actuarially uncharted marine territory, team oriented, convincing, open communicator both in respect of good and bad news. Works well under pressure, disciplined, solution oriented independent thinker with focus on quality and efficiency. Marine insurance or maritime experience would be an asset but is not essential, specific training will be available.

Candidates should quote reference BW 404 and apply to:-

walter_piccinni@swissre.com

3. USCG Enforcement of New Security Requirements

Denis Bryant, who is responsible for the e-zine called Haight's Maritime Items, writes:

The U.S. Coast Guard issued a Press Release reporting nationwide compliance data on the ISPS Code and the MTSA regulations. As of July 1, 270 foreign vessels arrived at U.S. ports. Of these, one was inspected at sea and six were denied entry, detained, or removed from port. Domestically, 42 U.S. vessels were restricted and 19 U.S. port facilities were restricted or closed because they were not in compliance with the Maritime Transportation Security Act (MTSA).

http://www.uscg.mil/news/Headquarters/JULY01stats.doc

4. The Month of June in Marine

Walter Mellert also holds the pen behind a monthly e-zine, which is the best summary we know for of all things marine and marine casualties:-

June (at least the last few days of it) has finally brought summer to Switzerland. It has also been blessed with a welcome absence of major marine disasters. May July be a worthy successor.

Some highlights:

• Spectacular and good quality pictures of the Tricolor "salvage": http://www.havenarbeiders.be/fototricolor.htm
• An explosion on the Spanish tanker Almudaina undergoing repairs at S'pore's Keppel yard kills 7.
• Chem tanker Shinwa Maru collides with GGC Thailine 6 and sinks off Japan, one man killed two missing.
• Tiger mosquito larvae (possible carrier of Dengue and Yellow fever), inside a used cement mixer imported on a Maltese flagged vsl from Japan to NewZealand illustrate that spreading exotic species is an ongoing process as long as there is trade & travel. Interesting question: Anybody out there that could be sued?
• Quote of the month: "Volume is vanity, profit is sanity!" Thank you, W.Zeller of HannoverRe.
• S&P is "encouraged" by reinsurers planning to reduce exposure (and thus topline) in lines of business showing signs of softening. Hear,hear!
• The AIMU revises their standard cargo clauses, in use since 1966. New forms for "all risks", "free of particular average" and "with average".
• Tanker shares shoot up as OPEC prepares to increase production, altruistically motivated by rising demand and a record $ 42 per bbl.
• Geared boxships climb over $13.5 per TEU day, with gearless remaining below $ 10.-
• 21 yr old Lebanese flagged Sea Trust, loaded with used cars for Syria develops a 48°list in Antwerp as a one car on fire triggers the fire fighting equipment. Salvors managed to get her nearly upright again.
• OPEC's increased production sends freight rates soaring to 140 worldscale raising transportation cost to Japan to $ 2.5 per bbl - roughly 7% of current crude prices.
• Heard of a bulker whose crew decided to scuttle her by opening a total of 92 valves yet failed as the cargo of soyabeans swelled with the incoming water, adding buoyancy and essentially plugging the holes - bizarre.
• Wallenius Wilhelmsen is back in graces with BMW, having secured a $50mio logistics deal for about 16'000 beamers to downunder. Above water please!
• The world order book hits a record 3818 ships,45% thereof shared equally by Japan and Korea. 30% are expected to be delivered in 2004, 23% will have to wait until 2006/07. Yet this is all just a blip really as longterm yard expansion in the Far East will outstrip demand again soon enough. Low, subsidized prices, increasing production costs and cut corners are, probably, here to stay.
• Frontline pays $ 184 mio for 2 new VLCCs coming off the yard this summer. Pertamina, the original owner of the contract had paid $ 130 mio,thus making a neat profit which might later have to be spent on excessive chartering though. New orders for a VLCC will go at $ 85 mio but you'll have to stand in line until 2008.
• Germany's appetite for shipping funds has increased by 60% to more than 2.3 bio, Annual returns >10%, top funds offering > 20% obviously help. High admin costs and long term commitment (12-16 yrs) sometimes dampen enthusiasm. The awareness that freight rates may fall again is brushed aside.
• VLCC day rates 2000 to today fluctuated between $ 10'000 and $ 115'000 with lows usually lasting a lot longer than peaks. For now we're at $ 75'000 and climbing.
• Toughening property standards apparently lead to increased pressure on the marine market to accept longterm stationary-, workover- and stock-through-put- risks. Beware of the hangover!
• The Indonesian parliament tries to pull the plug on Pertamina's tanker sale to Frontline but is checked by the minister for state enterprises. Politics!!
• A 267% 2nd quarter profit increase to $ 332 mio for Carnival, the worlds largest cruise co. Recovering prices and increased bookings are said to be the reason. Outlook stable.
• North of England P&I makes $ 34 mio surplus, on the back of improved investment income, Underwriting results were $ 18 mio negative.
• Times are getting tougher for Malacca Strait pirates as the Indonesian navy chief calls for them to be shot on sight. Open season.
• Subcontracted workers at Japanese building yards have twice the fatality rate of permanent staff. 10-12 hour workdays common in Far Eastern yards, aimed at working off the huge backlog also raise quality concerns. Is experience pricing still a good choice?
• Heard of an all risks, incl. war srcc, crude oil cover, mainly Russia to Mediterranean, on tankers up to 30 yrs old (talk about reputational risk!) at an amazingly shrunken hnrate of 0.06%.
• The CMI approves the York Antwerp Rules 2004 - main change: Salvage is no longer part of General Average. Don't forget, to be valid the new YAR need to be incorporated in the individual contracts of affreightment.
• 1yr prison term for the master and Euro 500'000 fine is demanded by a Marseilles court on account of a UASC box ship having washed her tanks causing an 18 km slick
• Total losses have again reduced in numbers for 2003 with 144 ships (0.56 mio GT). In total 0.16% of all ships afloat have gone, with general cargo vsls holding the record at 0.412%. Needless to say, age aggravates the risk substantially. A general cargo vsl 10-19 yrs of age is 3.8 times more likely to go bye bye than her younger sisters.
• 53% of both, ships and ports have reached ISPS compliance by July 1st, a fact some hail as a success. Australia for one has adopted a "two strikes and you're out" leniency policy.
• E-bay auction for film rights will help restore the 1925 art-deco ferry Kalakala, which served an undignified life as a fishfactory in Alaska since 1967, back to full glory by 2009. She had a lot of firsts at the time: No rivets, arc welded hull, streamlined shape, longest crank shaft to name just a few.

5. ISPS Thumbs Up from Mumbai

Naresh Salecha, the Senior Deputy Director General of Shipping writes:

The International Code for the Security of Ships and Port Facilities Code (ISPS Code) calls for the maritime administrations to ensure that all foreign going ships and port facilities, wherein such ships will be calling to comply with the requirement of the Code by 1st July 2004.

The Directorate General of Shipping as the Designated Authority for the implementation of ISPS Code on behalf of Govt. of India, related to maritime security measures is pleased to inform that;

1. All foreign going Indian ships i.e. 198 (which may occasionally undertake foreign going voyage) have complied with the requirement of the Code and have been issued the "International Ship Security Certificate".

2. 12 major ports and 33 non-major ports in compliance with the requirement of the Code have been issued with approved Port Facility Security Plans (PFSP).

3. The Directorate General of Shipping has also
established a state-of-the-art Communication Center to receive ship security alerts and other necessary security related information as required under ISPS Code.

4.In order to facilitate maritime traffic, necessary information required under SOLAS Convention (Regulation 13- Chapter XI-2) has been communicated to the International Maritime Organization for information and dissemination.

With the above measures in place, the Directorate General of Shipping has met its obligations under the new maritime security initiatives under the ISPS Code.

gssahni@dgshipping.com

6. And Finally...

We are indebted to Frazer Hunt in Sydney for sending in these maxims of postive thinking:-

Living on Earth is expensive, but it does include a free trip around the sun every year.

How long a minute is depends on what side of the bathroom door you're on.

Birthdays are good for you; the more you have, the longer you live.

Happiness comes through doors you didn't even know you left open.

Ever notice that the people who are late are often much jollier than the people who have to wait for them?

Most of us go to our grave with our music still inside of us.

If Wal-Mart is lowering prices every day, how come nothing is free yet?

You may be only one person in the world, but you may also be the world to one person.

Some mistakes are too much fun to only make once.

Don't cry because it's over; smile because it happened.

We could learn a lot from crayons:some are sharp, some are pretty, some are dull, some have weird names, and all are different colors....but they all exist very nicely in the same box.

A truly happy person is one who can enjoy the scenery on a detour.

PS from William Hagedorn in New York

IN MEMORIAM

This year marks the centennial of the untimely death of the renowned Scottish architect Angus Douglas McMiv. After his graduation from the University of Edinburgh, Angus, like many young architects, served an apprenticeship working on lesser buildings, but soon was recognized as a talented designer of government and commercial buildings, and by the time of his death was much renowned for his works in the classic style. Although many of them have been lost in the past 100 years, you may be fortunate to find a landmark built at the height of his career and identified by his name carved in the cornerstone:

A. D. MCMIV.

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