BOW WAVE 274

Bow Wave Issue 274--Fox Hunting Edition

news and views on trade, insurance and risk

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Wavy Line	sam@wavyline.com
(c)2005 WavyLine.com	Issue No 274 21 Feb 05
Published free of charge to Readers
Editor: Sam Ignarski
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In this issue:

1. Welcome
2. Shipbuilders' Risks--Constructing Solutions
3. Container Leasing--2005 State of the Industry
4. Danish Business Man fined A$6500 for Salami Smuggling
5. Judy Crick's Travels: Kilimanjaro
6. And Finally...

1. Welcome

Larry McMurtry in Roads (2000), his homage to the American highway writes:-

"This morning, outside of Dunseith, North Dakota, I had arrived at North-my personal north, at least. The arrival produced in me that empty feeling that I sometimes get after finishing a long work of fiction. For the moment a question had been answered: so now what do I do?

Fiction, for all its subtlety and variety--a subtlety and variety more glorious even than the plains along
U.S. 2--seems mainly to be asking two questions: Where does the road go? And how is one to marry?" ((p.205)

New Readers this week include:

Academic Roberto Bergami in Australia
Martin English, Manager, Recoveries at Xchanging Jeremy Prain in South Africa
Marie Barford
Loss Adjuster Andreja Meznar of Adria marine Ltd in Slovenia Mike Owen, marketing director of brokers Heath Lambert Captain Bert Wardetzki of Zeller Associates in Hamburg

News of Readers

Jeremy Prain has just returned after practising shipping law in Ipswich in the UK to his home town of Cape Town, South Africa, where he has joined the Maritime & Transport Department of Bowman Gilfillan Findlay & Tait, which has a well-established maritime law practice. His office is near the port, and we hope he will have one or two interesting stories to tell over time.

The London law firm Lawrence Graham has launched a ports services group--a move which follows the recent merger of specialist law firm Tite & Lewis with Lawrence Graham.

The new team is led by Christopher Tite and Louise Gowman and focuses on all legal aspects of port ownership, operation, development and regulation world wide.

For further information:-

christopher.tite@lawgram.com

News from AfterOfficeHours

Following our announcement of opening for beta-testing the first company to publish details in the new directory was Manu Marine in New Zealand, courtesy of Neil Abbott.

Encouraging feedback came from Sharon Cunningham of Shipping PR Specialists Dunelm who found the site easy to use and the layout clean.

Testers entering their details must take care to
release their information once they have completed the drafting--it otherwise remains invisible to browsers.

Read more in the new AOH Weblog at:

http://www.afterofficehours.com/news.php

Greetings from a sunny day on the Isle of Wight on the first weekend of the new ban on hunting with dogs, an illiberal measure which is indicative of the rise of the authoritarian trend in modern societies. May it too pass.

Enjoy.

2. Shipbuilders' Risks--Constructing Solutions

Bridget Hogan writes:-

Underwriters are facing continuing losses in the area of shipbuilding. Three recent cases combined are thought to have cost the industry hundreds of millions of dollars. This has prompted some to consider leaving the field altogether. For those that stay, reforms are needed. Join us for a free Association gathering to hear a distinguished panel consider what form these could take.

Venue: The Hospitality Suite
The International Underwriting Association
London Underwriting Centre
3 Minster Court
Mincing Lane
London EC3R 7DD
Tel: +44 20 7617 4444

Date: Thursday March 3, 2005 at 12.15 pm to 14.00 pm Please report to reception at IUA main entrance, Mincing Lane, Minister Court No 3.

Programme
12.15 Welcome and introduction
David Taylor, Hon. Secretary, Association of Average Adjusters

12.20 Discussion of the issues from speakers including: Member, Joint Hull Committee
David Burbridge Brookes Bell Jarrett Kirman
Nigel Rogers Deputy Chairman, Association of Average Adjusters
12.50 Informal discussion

13.20 Refreshments

14.00 Close

Please reply to Beidget by Friday February 25, 2005 at:

bridget_hogan@btinternet.com

3. Container Leasing--2005 State of the Industry

Analyst Charles De Trenck in Hong Kong, the Head of Regional Transport with Citigroup Smith Barney has sent in this report on one of the bell weather sectors in transport and shipping, a field which has burned many an unwary investor over the years. He concludes:-

"We flagged in 2003-04 steel price rebounds in relation to rebound in container box prices. Our focus was to track leasing rates from trough - we saw about a 50% rebound in leasing rates from lows (run off of 50%+ bounce in box prices)

Driver reversals? Now focus is on potential peak in box prices given more stable steel prices, slower trade growth drivers, stabilizing if not strengthening dollar, and continued relatively subdued long-term interest rates. Major monkey wrenches would be a return to declining dollar or a big jump in US 10-year rates.

End of box reflation? On balance a lot of the growth stories (or rebounds) in drivers we track are already delivered. Whereas two years ago we flagged reflation as a risk, risk now is that we may simply have
experienced a reflationary rebound inside a long-term deflation of equipment asset values, and thus pricing power in container industry. Dollar direction and trade flow are key.

Data and correlations. Taking correlations back to 1980, we find about a 0.60 correlation between steel prices and box prices, 0.70 between box prices and box leasing rates, and about 0.88 between leasing rates and US 10-year interest rates

COSCO Pacific (1199.HK; 3L; HK$17.35) is a top global player in container leasing, although COSCO Container Lines still makes up around 38% of about 920,000 TEU (end-2004) and about half of container leasing profits, with containers making up about 40% of profits."

For a full copy of the report, contact Charles at:-

charles.detrenck@citigroup.com

4. Danish Business Man fined A$6500 for Salami Smuggling

News reaches your editor of a recent decision in Queensland where a visiting Danish businessman, who failed to declare 4.5 kilos of salami (intended as presents) was fined by a magistrate's court in Cairns. The Australian quarantine authorities are extremely hard nosed in such matters.

So it seems is the national government; the announcement of the fine in an AQIS e-zine contains this sentiment in the sign off:

"Under the Howard/Anderson Government’s border protection policies, AQIS maintains a 100 per cent inspection rate on incoming international mail, shipping and air and sea containers, and approximately 90 per cent of passengers arriving at our international airports have their luggage x-rayed or opened. This compares with intervention of less than 5 per cent of international mail, very few sea and air cargo containers and only 25 per cent of passengers under the previous government.

"The Coalition has boosted the quarantine budget to $500 million a year, up from just $40 million 10 years ago --giving us the world’s largest dedicated border quarantine presence."

Read more at:

http://www.affa.gov.au/

5. Judy Crick's Travels: Kilimanjaro

Judy Crick has now returned to London from her travels. The final instalment of her traveblogue is lodged on the WavyLine website:-

http://www.WavyLine.Com

6. And Finally...

This description of the way we live now is not too far off the mark:-

Question: What is the truest definition of Globalisation?

Answer: Princess Diana's death.

Question: How So?

Answer: An English princess with a Welsh ex, and an Egyptian boyfriend, crashes in a French tunnel, driving a German car with a Dutch engine, driven by a Belgian who was drunk on Scottish whisky, followed closely by Italian Paparazzi, on Japanese motorcycles; treated by an American doctor, using Brazilian medicines. This is sent to you by an Anglo-American, using Bill Gates's technology, and you're probably reading this on your computer, that uses Taiwanese chips, and a Korean monitor, assembled by Bangladeshi workers in a Singapore plant, transported by Indian lorry-drivers and Burmese seamen, hijacked by Indonesians, sold to Lebanese interests, trucked through Syria and Turkey by Polish drivers, unloaded by Sicilian stevedores, and finally trucked to a town near you by Bosnian illegals, and sold to you by a store owned by Indians, and employing Sri Lankan computer experts ....

That, my friends, is Globalisation!

PS (with Thanks to Frazer Hunt)

A bus station is where a bus stops.

A train station is where a train stops.

On my desk I have a work station.

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