BOW WAVE 311

Bow Wave Issue 311--Prevarication Edition

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Wavy Line	sam@wavyline.com
(c)2005 WavyLine.com	Issue No 311 07 Nov 05
Published free of charge to Readers
Editor: Sam Ignarski
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In this issue:

1. Welcome
2. The Month of October 2005 in Marine
3. Quarterpoints for November
4. The ISM on Trial - 23rd November 2005
5. SeaandWater.Org
6. And Finally...

1. Welcome

Poem of the Week

Praise Song

Praise the light of late November,
the thin sunlight that goes deep in the bones.
Praise the crows chattering in the oak trees;
though they are clothed in night, they do not
despair. Praise what little there's left:
the small boats of milkweed pods, husks, hulls,
shells, the architecture of trees. Praise the meadow of dried weeds: yarrow, goldenrod, chicory,
the remains of summer. Praise the blue sky
that hasn't cracked yet. Praise the sun slipping down behind the beechnuts, praise the quilt of leaves that covers the grass: Scarlet Oak, Sweet Gum,
Sugar Maple. Though darkness gathers, praise our crazy fallen world; it's all we have, and it's never enough.

Barbara Crooker

New Readers This Week Include:-

Carolyn Maple of vehicle security specialists Maple Fleet Technology in Stockport Cheshire
Brian C.Selna, Vice President,California Insurance Center in Lafayette, California
Robert Hershenow of propane specialists Amerigas
Freelance journalist Ana Paula Nacif
Marie-Louise Rossi
Claire Jasper of the Concordia Consultancy

News of Readers

The Law Offices of Simon Harter, Esq. is pleased to announce the relocation of its Princeton, New Jersey office to 20 Nassau Street - Suite 211, Princeton, New Jersey 08542. Simon has been an admiralty lawyer for 19 years, first in New Orleans, then in New York and now in New Jersey. He invites readers to take a look at his website for more details

http://www.harterlaw.com

Brenda Horne, the CEO of the Maputo Corridor Logistics Initiative in Southern Africa has won the 2005 LCBT Business Personality Award awarded by the Lowveld Chamber of Business and Tourism for her energetic promotion of the area's infrastructure.

contact her at:-

brenda.horne@mcli.co.za

Readers Write

From John Lawrence CEO of IIMS

The International Institute of Marine Surveying
European Surveying Conference 2006 will take place in Antwerp on 15 & 16 May next year. Further details of speakers and subjects, will be publicised shortly. Anybody wishing to pre-register for this Conference should contact the IIMS Admin Office on

+44 (0)23 9258 8000
email:serve.com.

Greetings. Our correspondent Walter Mellert reckons the renewal season will be late this year--as reinsurers count the costs of this year's Altlantic storm season and the market prevaricates.

Enjoy.

2. The Month of October 2005 in Marine

Walter Mellert writes:-

Dear Mariners,

counting the losses, rethinking the models, analyzing the numbers , tempering that steely determination and getting your flu shots; - all in order to be prepared for the forthcoming renewal season.

-->Average cost paid by the US gov't for Katrina evacuees placed on Carnival Cruisers: $ 2'550 per person per week. Regular price for a Caribbean cruise: $ 599 per person per week. Looks like someone is making a quick buck.

-->China moves up to become the biggest steel producer with its 264 individual steel makers supplying roughly one third of the total world supply.

-->After 0 to 12.5% general increase on the 2005 P&I renewal, first forecasts for 2006 predict another 12.5% hike. Increased large loss costs, some modelling errors and more sophisticated vsls carrying more values are cited as some of the reasons.

-->The total offshore energy assets in Rita's path are estimated to total $ 11-14 bio.

-->Some $ 30 bio in new money is preparing to enter the game of cashing in on rising prices post Katrina and Rita. Hedge funds are prominent in that group of hopefools.

-->After 2 years off the stock market Bergesen worldwide one of the largest gas tanker fleets (47 owned 13 ordered and a few chartered) plans to go IPO.

-->Kuwait Oil Tanker Co (KOTC) decides to hold onto its old single hull VLCCs despite some lucrative ($38 mio) offers to sell. They probably have some inside info on the future charter market.

-->Quote of the month: "You can make recommendations until you're blue in the face; if you don't make it mandatory and enforce it, some people will invariably ignore good advice".

-->The average medium speed main engine damage cost is about $ 300'000 or 4 times as high as the same avg cost produced by less complex slow speed engines.

-->IUMI Amsterdam papers and presentations are available on http://www.iumi.com

-->European insurance buyers balk at possibly having to pay for US Katrina and Rita losses. Solidarity, global diversification and the possibility of a future North European hit don't figure in their reasoning.

-->Lubricants see price hikes in excess of 30%. Saving on them could easily spell trouble for the H&M insurer.

-->Piracy doesn't have to happen on the high seas - forcible boarding of a moored vsl in territorial waters adequately qualifies according to a Singapore judgement.

-->Worldcom's Ebbers gets 25 yrs, Sullivan only 5. The difference? Cooperation with prosecutors.

-->A Philippine aircargo customs inspector nearly lost a finger to an illegal shipment of Piranhas! They later died in the warehouse in the cold and the dark.

-->Another lovely quote: "Let us graciously forgive the severe limitations of those whose mental horizon extends to include only 30% of the planet's surface"!

-->Heard of a 29 yr old bulker ITC covered at 0.1275% net. If you think that's bad how about a cargo open cover ICC C incl. WSRCC at 0.025% gross!

-->Wilma almost behind us, the weather guys running out of names and the first of the Greek alphabet already causing heavy damage in the Caribbean, one starts to wonder: What's the plan?

-->Birdflu travels West at a rapid pace. Swiss gov't orders local chicks to henceforth only peck indoors.

-->Somali hi-jackers extend their operation further out to sea (<100 miles), seizing control of three different vsls within a few days.

-->Crude falls below$ 60 a bbl as Wilma misses the Gulf of Mexico installations. Seems almost cheap!

-->Whereas some modestly admit that their Nat cat models need nip & tuck adjustments post Ivan Katrina, Rita, Wilma, et al., others seem convinced that their current curves are just fine.

-->Nostradamus school of estimation: Make a guess and move on before events prove you wrong!

-->"Opportunities" in offshore energy and marine insurance are starting to attract new capital.
What's new?

-->Foot and mouth disease in MatoGroso puts an
almost complete stop on Brazilian beef exports

-->Beta is growing and gathering speed. Heading for the Caribbean / Central America

-->It will be a late renewal

Any opinion expressed in this item should be regarded as the personal opinion of Walter Mellert and not one made in his capacity as an employee of Swiss Re and any such opinion is not the opinion of Swiss Re, of any of its affiliated companies or of any of its officers or employees.Accordingly, Swiss Re hereby expressly disclaims any liability, loss, cost or expenses arising directly or indirectly from the content or expression of views of this newsletter or of other websites to which this newsletter may provide a link.

3. Quarterpoints for November

Your editor's latest column in Lloyd's List wonders how much longer insurers can go on paying the big port groups to insure with them....

Taking on P&O is hard to do

A student of containerization, one of the very few successful revolutions of the 20th Century, must also be a student of consolidation. Another giant in the making, a gargantuan one rather than a merely huge one, emerges with the story this week that the P&O Ports group is in play with suitors from Dubai, Copenhagen and Singapore in hot pursuit. It seems only a few months ago that ports and terminals were pronounced as P&O’s core activity, as opposed to cruise liners, ferries and ocean containers.

Certainly for most of my working life, the container terminal operators did a better turn than their peers in liner shipping. Even in the days before the large groups, a decent sized container terminal in a key location could be relied upon to return to investors 10 to 15 per cent. And the terminal operators who had substantial interests in the Pacific were the first ones to cotton on to the prospects of introducing ordinary standardized operational efficiency into the terminals of places where the port sector was still in the Cinderella stage. And in fact it was a small but effective unit in the Sydney office of P&O, staffed with Australian former mariners which did so much pioneering in places like Vostochney, Manila, Irian Jaya, Sheckou and elsewhere during the early 1990s.

Today these terminal groups are huge and getting huger. The largest of them all Hutchison Port Holdings, has been in strong acquisitive mode throughout the last ten years and has an outstanding presence in all the high castles of the container industry with the exception of the United States, where it has confined its activities to places on the American periphery like Bahamas Freeport and Panama. P&O Ports at first assembled into a group organically, step by step, in single operations, often under nothing more capital intensive than a management contract or a smallish acquisition in the Antipodes later on turned more aggressive with the purchase of the ITO group of terminals, all in the United States. But still in terms of sheer size and capital, P&O Ports has tended to lag behind the scale of the other large groups. Not for much longer it seems.

It has dawned on the analysts that the sale of P&O Ports may not be as straightforward as say the ocean shipping parts of the company. For a start there are 12 foreign governments, local authorities and port authorities who have concluded deals with the company, some full blooded Build Operate and Transfer deals, others more special to the location as it were. How comfortable will the Americans the Chinese, the Russians or the Indians be with new owners?

Another realization dawning in the world of marine insurers is that this kind of scale represents the far end of the spectrum of doability. How do you insure these terminal groups in respect of their liabilities and assets? With rock bottom rates and strong hope in the hearts of the underwriters is how judging from current exponents. In a matter of a few years, some of the largest claims in the history of the ports industry have come home, largely in the international marketplace where the insurers are beginning to look distrinctly outgunned by their "blue chip accounts." Typhoon Maemi dealt a pasting to those concerned in the new HPH operation in Busan , and Hurricane Katrina has stung those insurers who have taken on the P&O and AP Mueller operations in Gulfport and New Orleans respectively. These kinds of companies can buy and sell their insurers many times over and can fund a catastrophic loss far more readily. The evidence tends to disclose that this is a category of business which is unsustainable by even the largest marine underwriters today. Large groups will soon pass into the heights scaled by the giagantic parcel companies in the 1980s, the UPS, Fedex and DHLs of this world, a category of company which became too large and too dominant in the markets to bother much with the smaller coinage of trade insurances. The same sort of thing may be true of their relationships with bankers.

For some reason, the list of insurers wanting to write risks on the waterfront has been expanding over the last three or four years. Since there are 8000 ports in the world which can be taken very seriously by insurers, many of which contain many terminal operations, it may be seen that there are more than enough to target for any man’s marketing campaign. But it may be a lot easier to make an underwriting surplus year on year from the coming things and the wannabes in the sector.

4. The ISM on Trial - 23rd November 2005

Gerard Mathews has sent in this notice:-

The London Shipping Law Centre's event on the "ISM on Trial" took place on 15th June in London. It was a unique event and was successful in bringing to the fore a fresh understanding of a number of issues relating to the ISM Code.

By way of a mock trial, the event dealt with issues which can arise in a realistic scenario where deficiencies in the implementation of the Code can lead to problems in defending a cargo claim, or limiting liability. It involved examination of witnesses by two Queen's Counsel. The witnesses played the roles of a Designated Person (DPA), a representative of a recognised organisation (RRO) and an expert witness. The judge delivered judgment at the end.

Due to the importance of this event and its popularity, it is to be repeated on Wednesday 23rd November at 6.00 pm at Clyde & Co. with a slightly different cast and scenario.

The main issues to be explored will include:

Ø What type of ISM deficiencies would corroborate evidence of unseaworthiness of the relevant ship?

Ø What would the effect of ISM deficiencies be upon t he right of the owner to limit liability?

Ø What would the effect of ISM deficiencies be upon the insurance contract?

Ø The legal position of the DPA and how his conduct in the performance of his duties under the ISM would affect the relevant company?

PANEL
Dr Aleka Mandaraka-Sheppard (Moderator)
Belinda Bucknall QC (The Judge of the case)
Simon Kverndal QC (Counsel for the Claimants)
Bernard Eder QC (Counsel for the Defendant)
Ian MacLean - Bentleys Stokes & Lowless - the DPA Capt. Andrew Mitchell - Lloyd's Register (RRO)
Dr. Phil Anderson - ConsultISM - Expert Witness

Attendance at this event will be of great benefit to regulatory authorities, shipowners and ship managers who are directly affected.

The event is open to all sectors of the shipping community and bookings can be made through the Centre on

tel: 020 7679 1512
e-mail:.uk

5. SeaandWater.Org

Mike Elsom has sent in details of his organisation's new database:-

Funded by the Department for Transport and developed and operated by Sea and Water -- the UK body charged with encouraging freight off the roads and onto shortsea, coastal and inland shipping -- this new system provides a FREE comprehensive and user-friendly information database for the water-freight industry and its customers.

This web based system, developed to fill a knowledge gap, brings together all sectors of the industry to demonstrate its full capabilities and further potential to provide a large part of the solution to the UK transport problem. Searchable databases provide up-to-date information on shortsea and coastal feeder services from all UK ports, giving direct links to operators and agents. Port-to-port and door-to-door roro and lolo services are all fully described as are wet and dry bulk carriers with a potential to operate in and around UK waters. A comprehensive database of coastal and inland ports, terminals and related facilities is also offered and complementing this are full details of agents, brokers and stevedores. To demonstrate the potential for inland movement of freight, the major freight carrying waterways are described together with relevant access points, freight handling facilities and operators of inland craft.

The added benefit of this system is that is contains a series of maps and charts which allow users to view the exact location of all the services described. Users may choose to plot sections of coastline or inland waterway to view freight handling facilities and how they connect to the internal road and rail network as well as other European destinations.

This is a FREE system aimed at the industry and its customers alike. It provides the opportunity for industry sectors to better present themselves to their customers and also for buyers of transport services and potential users of the water mode to understand how the industry fits together and what it can offer.

Industry users of the system also have the ability to ensure their information is bang up to date and there is potential for interested companies to advertise their expertise on the site.

http://www.seaandwater.org

6. And Finally...

Many thanks to Capt John Sweetman and wife Yupaporn for

Thirty Lines To Make You Smile

1.. My husband and I divorced over religious differences. He thought he was God and I didn't.

2.. I don't suffer from insanity; I enjoy every minute of it.

3.. I Work Hard Because Millions On Welfare Depend on Me!

4 Some people are alive only because it's illegal to kill them.

5.. I used to have a handle on life, but it broke.

6.. Don't take life too seriously; No one gets out alive.

7. You're just jealous because the voices only talk to me.

8.. Beauty is in the eye of the beer holder.

9.. Earth is the insane asylum for the universe.

10..I'm not a complete idiot -- Some parts are missing.

11..Out of my mind. Back in five minutes.

12..NyQuil, the stuffy, sneezy, why-the-heck-is-the-room-spinning medicine.

13..God must love stupid people; He made so many.

14..The gene pool could use a little chlorine.

15..Consciousness: That annoying time between naps.

16..Ever stop to think, and forget to start again?

17..Being "over the hill" is much better than being under it!

18..Wrinkled Was Not One of the Things I Wanted to Be When I grew up.

19..Procrastinate Now!

20..I Have a Degree in Liberal Arts; Do You Want Fries With that?

21..A hangover is the wrath of grapes.

22. A journey of a thousand miles begins with a cash advance

23..Stupidity is not a handicap. Park elsewhere!

24..They call it PMS because MadCow Disease was already taken.

25..He who dies with the most toys is nonetheless dead.

26..A picture is worth a thousand words, but it uses up three thousand times the memory.

27..Ham and eggs. A day's work for a chicken, a lifetime commitment for a pig.

28..The trouble with life is there's no background music.

29..The original point and click interface was a Smith and Wesson.

30..I smile because I don't know what the heck is going on.

PS Thanks to Garrsion Keilor's Prairie Home Companion for this Pretty Good Joke:-

A cowboy walks out of a bar and a second later comes back in, mighty mad. "Okay," he growls. "Now which one of you sidewindin' hombres went outside an' painted mah horse bright red while I was a-drinkin'?" Nobody answers, and the cowpoke draws his six-shooter and yells, "I said which one of you mangy polecats painted mah horse red?!" Slowly one of the cowboys at the bar stands up. He is six feet, nine inches tall, and he pulls a small cannon from his holster. "I done it," he growls. The first cowboy puts his gun back in the holster and says, "Just wanted to let you know the first coat's dry."

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