BOW WAVE 279

Bow Wave Issue 279--A Better Edition

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(c)2005 WavyLine.com	Issue No 279 28 Mar 05
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Editor: Sam Ignarski
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In this issue:

1. Welcome
2. March Quarterpoints
3. TOC Asia 2005
4. So Farewell Then, Hank Greenberg
5. Pregnant? But how did that happen?
6. And Finally...

1. Welcome

Poem of the Week

Dover Beach

The sea is calm tonight.
The tide is full, the moon lies fair
Upon the straits; on the French coast, the light
Gleams and is gone; the cliffs of England stand,
Glimmering and vast, out in the tranquil bay.
Come to the window, sweet is the night-air!
Only, from the long line of spray
Where the sea meets the moon-blanched land,

Listen! you hear the grating roar
Of pebbles which the waves draw back, and fling,
At their return, up the high strand,
Begin, and cease, and then again begin,
With tremulous cadence slow, and bring
The eternal note of sadness in.

Sophocles long ago
Heard it on the Aegean, and it brought
Into his mind the turbid ebb and flow
Of human misery; we
Find also in the sound a thought,
Hearing it by this distant northern sea.

The Sea of Faith
Was once, too, at the full, and round earth's shore Lay like the folds of a bright girdle furled.
But now I only hear
Its melancholy, long, withdrawing roar,
Retreating, to the breath
Of the night-wind, down the vast edges drear
And naked shingles of the world.

Ah, love, let us be true
To one another! for the world, which seems
To lie before us like a land of dreams,
So various, so beautiful, so new,
Hath really neither joy, nor love, nor light,
Nor certitude, nor peace, nor help for pain;
And we are here as on a darkling plain
Swept with confused alarms of struggle and flight, Where ignorant armies clash by night.

Mathew Arnold

New Readers this week include:

Donald Forbes, CEO of Yacht-Secure Ltd in London
Jeffrey Joneal Lunde, 72 Hr Task Force / Campaign Coordinator Senate District 47 Republicans
Paul Gallagher of Damco
Barbara E. McClellan of TCA Inc in California
Broker Richard Hilliard
Ann Hagen of Crisis Response Advisors BSYA

Readers Write

From Vincent M. DeOrchis in New York:-

Re: Intermodal Equipment Safety and Responsibility Act of 2005

I thought you might be interested in the "heads up" I am sending to some clients. There is a Bill (H.R. 1296) that was introduced a few days ago before the US Congress that may become law later this year. It was written up by the trucking industry, which has a very powerful lobbying group. The Bill attempts to place the burden of inspecting equipment on the "equipment controller", which in my opinion will mean the ocean carrier. The Bill covers containers and chassis, and holds the equipment "controller" responsible and liable for systematic inspection, maintenance and repair of equipment interchanged, including meeting federal standards for repair. Furthermore, any "hold harmless" provisions that now appear in the interchange contract with the trucker to protect the ocean carrier are legally ineffective. Additionally, there must be several annual periodic inspection and an audit program for equipment (which you know will be called upon by cargo and personal injury claimants in any cases arising from trailer damage). The last insult from this Bill is that if the ocean carrier does not give the trucker his equipment within 60 minutes of when the trucker demands the equipment, it will be treated as "retaliation" and the ocean carrier is subject to a civil penalty of $10,000. That should go over great in ports with congestion problems.

I understand that OCIMA is trying to fight the legislation. I am not sure about the World Shipping Council. My prediction is that this Bill, if enacted, would mean bad news for ocean carriers in the future.

Contact him at:-

vdeorchis@marinelex.com

Notwithstanding the run up to the Easter holidays, our correspondents have ensured we can offer one of our better issues in recent months.

Enjoy.

2. March Quarterpoints

Your editor's column in Lloyd's List last week meditates on the shrinking horizons of marine insurance....

Marine Associations

The great thing about life as a columnist is how the freedom of the job allows one to describe associations between two or more small but not necessarily related observations made during a workaday weeks spent in London. The other day, looking over the shoulder of a seasoned insurance professional I read upside down a list attempting to describe the whole of the London fixed insurance market which had an interest in marine and transport risks. And the thing which was most striking was how a single piece of A4 paper, divided into two columns was more than sufficient to do the job. The list of syndicates in Lloyd's still at least describable as "interested in marine" is not long: about two dozen--and the companies market is even smaller. The numbers are then made up of overseas companies with marine branches in London or interested in taking in marine reinsurance business.

Though I have been describing the consolidation of this market for many years, it is always sobering to see a practical demonstration of atrophy in a simple descriptive list.

This is not to say that the capacity on offer is necessarily less-figures tend to demonstrate that the international marine insurance market whose traditional home is London has tended to hold its own so far as premium income is concerned-albeit in a global market where the total business on offer has grown.

And of course the traditional marine world which was once serviced by hundreds of rather small marine underwriters has been eclipsed by companies who present risks of a different order of magnitude. Take the cargo on board one of the new 8000 teu container ships. Or indeed take the cargo present in one of the new regional distribution centres. Or the property risks of a multinational terminal operating company located in dozens of locations around the world. Or the risks of product liabilities being assumed by the new breed of 3PLs (formerly known as freight companies) who nowadays carry out assembly, distribution and fitting operations on behalf of clients to such an extent that they run the danger or being deemed producers of the goods themselves. None of these risks are in any way suitable for the poorly capitalised marine and transport underwriters of yesteryear. And I am far from certain that many of the current players in the market can really prevail over the distance being constrained as they are to lay off much of their risk to a relatively small number of reinsurers who have the tendency (as do our popular friends in the banking industry) to take away the financial umbrella when the financial storm is at its height.

Later on in the week I paid a visit to the open day held by Kinnect in the Lloyd's Building. There the organisers laid on a series of briefings demonstrating how this market linking platform will work. It is already in use for US Property reinsurance business and is designed to be rolled out to the market as a whole by 2006. Much investment has already been sunk. Hats are being tied to the new imperatives of transparency, contract certainty and lowering process costs. Expectations are that the marine market will be one of the hardest nuts to crack in the take up of the system. The large insurance brokers have not been famed over the last 5 or 10 years for their skilled use of electronic tools in their operations. Is the platform of Kinnect aimed at the Marsh broker in Shanghai or the Marsh broker in his office near Tower Bridge? This is one of the key questions given that the whole issue of distributing insurance around the world at economic rates is still in a state of grave uncertainty and doubt.

In theory at least, once you have a reliable tool usable by anyone sitting at a connected terminal, the office corridor can span the globe. A new breed of insurance executive is called for, the kind able to work through others via well designed, reliable computer networks, well known brands and widely observed rules, regulations and law. Though insurance profoundly is a people business, in today and tommorow's world the management of the technology in use has a great deal to do with success or failure. It could well be that the future of the marine insurance market, one of the world's first global markets, depends on how well carries out a belated accommodation with the information technology it is so reluctant to embrace.

3. TOC Asia 2005

Industry Analyst Charles De Trenck of SMITH BARNEY/ Citigroup has sent in this very helpful round-up of the recent terminal conference in Hong Kong:-

TOC Asia 2005 Takeaways: Some Asia capacity strains selectively, but huge efficiency gains ... and still plenty of spare capacity when scratching the surface...HK...China...S. Korea

***

We presented on EXCESS PORT CAPACITY in Asia
last week in HK...while other presentations ran the range of HK, China and Asia issues...presentations will be posted on the TOC Asia 2005 website in about a week.

We also spent half a day touring Yantian operations in Shenzhen. I have to say Hutch Ports did a great job taking about 50+ industry people around. It is clear that this operation's efficiency on a gross (not per sq m) basis is ahead of HK operations at this point.

--> Yantian is now running about 500+ TEU in barges down to HK/day (who needs trucks?)
--> Yantian now running 9 berths (9x350m) after IIIb 2+2 came on line essentially last year
--> Capacity essentially 10m TEU (also as defined by IT capabilities) against 6.3m TEU in 2004
--> 38 cranes and 154 yard gantry cranes...avg crane assumption is 263,000TEU/year
--> TEU crane/hour in 2002 26.6...In 2004 33.0... In Feb 2005 35.9
--> About 22 of 38 cranes are ready for vessels that won't get ordered for awhile (18,000TEU ships) --> About 65% of biz is to US and about 30% to Europe (70% and 25% previously)
--> About 1% or less of volumes currently by rail --> nGen new terminal software was implemented one year before HK in 2003
***

Good presentations (sorry was not able to attend all of 'em but here's a few):

Alan Lee, HK Container Term Operators Assoc

Alan's official forecast is for HK to be at some 40m TEU by 2020 and STILL equal to Shenzhen.

In 2015, official forecast calls for 36m TEU in HK (ours is 37m TEU)...while Shenzhen f'cast is 29m TEU (ours is 36m TEU).

Most of the proposals for solving HK's problem's focus around getting truckers to run more efficiently, as highlighted in so many recent studies. Goal to narrow US$300 gap per box between HK and Shenzhen.

***

Jack Helton, APM Terminals (moderator)

...Be prepared for challenges of size, growth, security....

***

Hans-Herman Mohr, Senator Lines

Good overview of Senator operations

Predictions: 2005 small vessels to focus more on trans-shipments leaving the heavy lifting or core long haul to bigger ships. THis is in line with view of increasing efficiency of long-haul ships in face of congestion and supports view for strong demand for feeder ships...Hub & Spoke inferior model at the moment

***

Choo June Sook, Pusan Port President

A little case study on 11 cranes destroyed in typhoon Sept '03 --> back in action by Mar '04

--> 60% of volumes local and 40% trans-shipments. Busan 1/3 cost of HK
--> Vols to Japan up 23% in 2004. 55% of T/S is China-related, 35% Japan

Discussion of redevelopment of Pusan Port and new Port (25km distance)

--> Berths 1-4 will be converted for Pax cruise and other at old port (Old port total berths = 30)

--> Phase I 9 berths: First 3 berths will be on-line at new port in 2006; 2007 2nd 3 berths; 2009 3 more berths

...This was a very good presentation, though no answer as to our question on cooperation with neighboring Kwangyang which we estimate has 25% utilization...

****

Ian Richardson, UPS, on supply chain visibility

--> A comparison on thinking of supply chain cost vs merchandise chain cost
--> 68% of 2004 volumes were into LA & Oakland for UPS on sea freight side...2005 looking at Seattle and Panama canal... UPS is example of relative newbie to freight forwarding following Fritz acquisition a few years ago
--> UPS now working on more transport and cargo definition options..."Store Ready" which bypasses DCs (distribution centers)...

... A lot of what UPS was saying is what logistics operations traditionally do, so question is how much better can they do it...

****

Edgar Abesamis, ICTSI

There were some good case studies in here on how ICTSI turned their Poland and Brazil terminals into upgraded, more efficient facilities...

Pls ask if you are interested in more details here

3 pages of notes...

****Graham Mulligan moderator***

Sri Lanka Ports

Good detail on substantial expansion plans, with capacity going from 3.3m TEU to upwards of 10m TEU. Phase I will double current capacity with $300m program to begin 2006 and complete 2009

****

Maunsel on Role of inland container depots

--> 'It's not only about the terminal but about the landside' --> Push for better planning...better inland depots... better rail...more backup land
***

Our presentation on excess port capacity in Asia was in afternoon of Day 1

****

Other presentations: labor relations at ports...terminal management software including interesting case studies on terminals such as Chiwan and increasing crane productivity....

****

Discussion on Middle East and related: +24% at UAE and +26% at Dubai in 2004. Much but not all was Iraq-related materiel, though also good showing from local cargo...discussions on some high prices for recent terminal purchases including Dubai strategy in HK and Maersk strategy in Lagos...

****

Charles de Trenck
Head of Regional Transport
charles.detrenck@citigroup.com

4. So Farewell Then, Hank Greenberg

Some very pungent writing in this month's Insurance Insider in the Marcus Scriven Profile on Martin Sullivan, the new man at the head of AIG who replaces Hank Greenberg:-

".....A market veteran who has enjoyed Mr Greenberg's society for several decades offers a sketch. "People there were scared stiff. If you went to the AIG offices downtown ..where there were guys earning, I don't know, a million dollars a year, you realised that they were scared stiff if they didn't get back to their desks at one minute to two. Hank would come in, after his lettuce leaves and gym, at 2pm; he had to walk past them at their desks. He is a tyrant", adds this observer admiringly. Other AIG scholars agree. "It's a business held together by fear," argues one of them. "Fear is the glue. Take the fear away..." "

Oh aye, it's a people business. (Bow Wave ed)

To subscribe to the Insurance Insider, a publication with attitude which no sensible insurance person should miss contact the editor Peter Hastie at:

info@theinsider.co.uk

5. Pregnant? But how did that happen?

Problems of interpretation very often arise after the event, when the words of the agreement can be dissected at leisure in light of the facts. But questions about the existence of a contract usually require a snap decision in "real time" and the consequences of calling it wrong can be catastrophic.

This is the area to be explored at a one day seminar to be held in Montreal on 18 May and entitled:"Pregnant? But how did that happen?--Contract Formation and Shipbrokers". Speakers from England, the United States and Canada will discuss a variety of practical issues, including the role of brokers and intermediaries: how far can they commit their principals without their knowledge? And what are the consequences of the intermediary acting outside his authority, whether intentionally or not?

The cost of admission will be $75 per person, including a sandwich lunch and the opportunity to have a drink with the speakers afterwards. The person to contact is John Weale at:-

jweale@fednav.com).

6. And Finally...

Many thanks to Paul Dixon's Joke of the Day for this insight into dialect:-

How to speak New Zealand
Say out loud for full effect!

Milburn - Melbourne. capital of Victoria
Peck - Pack. to fill a suitcase
Pissed aside - Pesticide chemical which kills insects Pigs - Pegs for hanging out washing with
Pump - Pimp to act as agent for prostitute
Pug - Pig large animal with a curly tail
Nin tin dough - Nintendo. computer game
Munner stroney - Minestronie. soup
Min - Men. male of the species
Mess Kara - Mascara eye makeup
McKennock - Mechanic. person who fixes cars
Mere - Mayor
Leather - Lather foam produced from soap
Lift - Left. departed
Kiri Pecker - Kerry Packer. famous Australian businessman Kittle crusps - potato chips
Mulk - milk, stuff that comes out of cows
Jumbo - pet name for someone called Jim
Jungle Bills - Christmas carol
Inner me - enemy
Guess - Gas. vapour
Fush - Fish. marine creatures
Fitter cheney - Fetticini. type of pasta
Ever cardeau - avocado
Fear hear - Fair hair. blonde
Ear - Air mix of nitrogen and oxygen
Ear roebucks - Aerobics. exercise at the gym
Duffy cult - Difficult. not easy
Amejen - Imagine.visualise
Day old chuck -Chick very young poultry
Bug hut - Big Hit. popular recording
Bun button - been bitten by insect
Beard - Bed a place to sleep
Sucks Peck - Six Pack. Half a dozen beers
Ear New Zulland - Air New Zealand. an extinct airline Beers -Bears. large savage animals found in U.S. forests Veerjun - mythical New Zealand maiden
One Doze -Windows. well known computer program
Brudge -Bridge. structure spanning a stream
Sex -Six. one less than sivven
Tin - Ten.one more than nine
Iggs Ecktly - Exactly.Precisely
Earplane -Aeroplane. large flying machine
Beggage Chucken -Baggage checkin.
Sucks Sivven - Six Seven. large Boeing aircraft
Sivven Four Sivven - larger Boeing aircraft
Cuds - Kids. children
Pits - Pets.domestic animals
Cuttin - Kitten. baby cat
Munce - Mince. usually served on toast

PS....I Spy.....

Spotted in the Kiel Canal and courtesy of David Cheslin and Marko Stampehl, the Isle of Wight Ferry "Red Eagle" on her way home from modifications carried out in Gdansk.

http://www.faktaomfartyg.com/red_eagle_1996_b_7.htm

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