BOW WAVE 459

Bow Wave Issue 459--Plenty Edition

news and views on trade, insurance and risk

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Wavy Line	sam@wavyline.com
(c)2008 WavyLine.com	Issue No 459 08 Sep 08
Published free of charge to Readers
Editor: Sam Ignarski
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In this issue:

1. Welcome
2. The Month of August 2008 in Marine
3. North German Thumbs Down on Container Newbuildings?
4. Quarterpoints
5. Seascapes
6. And Finally...

1. Welcome

Poem of the Week

Telegraph Road lyrics

A long time ago came a man on a track
walking thirty miles with a pack on his back
and he put down his load where he thought it was the best made a home in the wilderness
he built a cabin and a winter store
and he ploughed up the ground by the cold lake shore and the other travellers came riding down the track and they never went further, no, they never went back then came the churches then came the schools
then came the lawyers then came the rules
then came the trains and the trucks with their loads and the dirty old track was the telegraph road
Then came the mines - then came the ore
then there was the hard times then there was a war telegraph sang a song about the world outside
telegraph road got so deep and so wide
like a rolling river. . .
And my radio says tonight it's gonna freeze
people driving home from the factories
there's six lanes of traffic
three lanes moving slow. . .
I used to like to go to work but they shut it down I got a right to go to work but there's no work here to be found yes and they say we're gonna have to pay what's owed we're gonna have to reap from some seed that's been sowed and the birds up on the wires and the telegraph poles they can always fly away from this rain and this cold you can hear them singing out their telegraph code all the way down the telegraph road
You know I'd sooner forget but I remember those nights when life was just a bet on a race between the lights you had your head on my shoulder you had your hand in my hair now you act a little colder like you don't seem to care but believe in me baby and I'll take you away
from out of this darkness and into the day
from these rivers of headlights these rivers of rain from the anger that lives on the streets with these names 'cos I've run every red light on memory lane
I've seen desperation explode into flames
and I don't want to see it again. . .
From all of these signs saying sorry but we're closed all the way down the telegraph road

Thanks to Jeff Blum for submitting this

New Readers this week include:-

Gareth Clarke of brokers Colemont
Francois Luigi of Marrfret in France
Average Adjuster John Ahern
Bryan Stapley in Australia
Pieterjan Brands of the Raets Club in Rotterdam
Andrew Yeo of the COS in British Columbia
Marc Bearman of Guy Carpenter
Shaun Fyson of Regis Mutual Management

News of Readers

Stephen Brown (formerly of TT&T Ltd) has been appointed President of the British Colombia Chamber of Shipping

Philip Kempe, formerly of the Swedish Club has become a Pilot - Master Mariner for the Swedish Maritime Administration

Pilots have intimate knowledge of fairways and vast experience manoeuvring many different types of vessels. They contribute to maritime and environmental safety and make it possible to maintain navigability when vessels operate in Swedish inland waterways.

Pilotage operations may be said to consist of three parts: ordering/administering the pilotage assignment, transporting the Pilot to and from the assignment and finally, performance of the assignment.

There are about 215 Pilots employed by the Swedish Maritime Administration (SMA). SMA provides pilotage and assistance in the navigation to vessels within Swedish territorial waters. In 2007, 40 217 Pilotages were conducted.

Contact Philip at:-

philipkempe@yahoo.com

William Lyth, formerly of Paccship (UK) and Clarksons, as has joined the London based Baltic Exchange team responsible for the production of its daily shipping indices and fixture lists as Senior Freight Market Reporter.

Note from the Editor

Greetings from wet windy England where a wet autumn seems destined to rise on the evening of a sodden summer.

Plenty to read in this edition as the holiday season ebbs.

Enjoy!

2. The Month of August 2008 in Marine

Jason Copland writes

Here we are at the start of September and it seems as though the summer is already heading out the door and Autumn is approaching (for UK readers, please note that this year's summer took place on August 7 starting at 13:43 and finished at tea-time) Before we forget all about the summer and concentrate on the upcoming Conference season, here's a look back at August in marine:-

1 Aug Much has happened on this day: the Swiss Confederation was formed in 1291, the Battle of the Nile (Aboukir Bay) began in 1798, the Kingdom of Great Britain and the Kingdom of Ireland merge under the Act of Union in 1800 to form the United Kingdom, the United States buys the rights to the Panama Canal from France in 1902 and in 2007, the river bridge I 35W crossing the Mississippi River at Minneapolis collapsed during the evening rush hour.

4 Aug The European Commission withdraws recognition of the Greek Hellenic Register of Shipping meaning new certificates issued by the society will not be acceptable within the EU. It is expected that the Hellenic register will lodge a complaint.

4 Aug SCOR goes shopping again and announces that it will purchase French company Prevoyance et Reassurance in a share transfer deal with the current owners worth EUR 53 million. Prevoyance et Reassurance wrote EUR 77 million in net premium in 2007 and made a profit of EUR 4.6 million.

5 Aug Croatia's Uljanik shipyard wins an order worth US$ 250 million for two ultra modern livestock carrying vessels for Siba Ships. The vessels are due to enter service in 2011 and be able to carry either 18,000 cattle or 75,000 sheep.

5 Aug Crude oil prices start to rise as oil industry workers in the Gulf of Mexico are evacuated in advance of tropical storm "Edouard"

5 Aug Fortis announces its second quarter results with better than expected results, losses from credit business amounting to EUR 33 million. Profit was EUR 423 million.

5 Aug Swiss Re releases the second quarter earnings results with a profit of CHF 564 million and announces a new acquisition by Admin Re of Barclay's Life for GB£ 753 million. Meanwhile Flagstone Re announces an operating income increase of 142% to US$ 40.2 million with gross premiums of US$271.2 million. Munich re reported a net profit of EUR 1.37 billion

6 Aug Mumbai based Mercator Lines applies International Paints anti-fouling coating Intersleek 900 to its Aframax ship "Prem Divya". The entire underwater hull area has been treated with the special paint and initial results show a fuel saving of approximately 6%. With this 105,000 dwt Tanker, this amounts to a saving of about 3 tonnes of bunker fuel per day. For more information on this and other IP products go here:-
http://www.international-marine.com/default_test.asp?folder=datasheets/&page=main.asp

6 Aug Chinese shipbuilder, Rongsheng Shipbuilding and Heavy Engineering reportedly lands an order for 12, 400,000 dwt Ore Carriers worth a total of US$ 1.6 billion. The vessels are to be built for Brazil's Compania Vale do Rio Doce. The vessels are due for completion by 2012 and will operate on the Brazil-Asia shuttle route for Vale.

7/8 Aug As the Beijing Olympic games get under way Georgian forces launch an attack to try to take control of the break away province of South Ossetia. In the ensuing conflict, Russia sends its forces to take control and repel the Georgians, occupying large parts of the country and taking control of the port of Poti. Some ships in the port are damaged.

12 Aug A group of 20 sailors set off for a circumnavigation of Africa on board a replica Phoenician ship the "Phoenicia". Details and progress of the ship can be found on the website at:-
http://www.phoenicia.org.uk/

13 Aug Allianz announces plans to merge its marine operations in New york with the marine business from Allianz Global Corporate and Specialty and the US based subsidiary Fireman's Fund. This will create the world's largest direct Marine insurance operation with an expected premium level of around US$ 1.5 billion and roughly 9% of the world market.

15 Aug The 16,248 DWT Thoresen owned general cargo ship "Thor Star" is hijacked by pirates some 100 miles off the Yemeni coast.

18 Aug Doosan group pulls out of the bidding race for Korea's Daewoo Shipbuilding and the steel group Posco announced that it was looking for partners to help acquire Daewoo.

20 Aug Oil numbers: 53 companies placed a total of 423 bids on 319 tracts totalling over 1.8 million acres of "land" offshore Texas in the "Western Gulf of Mexico Oil and Gas Lease Sale 207". The sale raised just over US$ 607 million in total, the highest bid was US$ 61 million from Statoil Gulf of Mexico LLC for deepwater block 380 in the deepwater area Alaminos Canyon.

20 Aug 153 people are killed after a Spanair MD82 plane bound for Las Palmas crashes shortly after take off at Madrid airport.

20 Aug Pirates strike again off the coast of Somalia and hijack the Malaysian Palm oil tanker "Bunga Melati Dua". This is the fourth piracy attack within one month.

21 Aug Somali pirates strike again hijacking two vessels, a Japanese Tanker and an Iranian bulk carrier the victims this time.

24 Aug Harland and Wollf shipyard in Belfast is briefly evacuated after a fire broke out on board a ship undergoing repairs in the yard.

24 Aug Happy Birthday wishes are due to StatoilHydro's Sleipner Platform which turns 15 today. Just two of the facts relevant to this platform: total production to date is now at 1.8 billion barrels oil equivalent and
the loss of the original subsection which sank during construction of the platform caused a seismic event measuring 3.0 on the Richter scale when the concrete base hit the bottom of Gandsfjord at a depth of 220 metres. More information available at StatoilHydro's press centre:- http://www.statoilhydro.com/en/NewsAndMedia/News/2008/Pages/Sleipner15.aspx

25 Aug A dockworker dies as a result of an accident during unloading at Oakland Port. One astounding feature of this item is the age of the worker:
http://www4.marinelink.com/en-US/News/Article/327857.aspx

26 Aug The International Maritime Bureau issues a piracy warning for the Gulf of Aden region after four ships are attacked within 48 hours. The IMB warning also shows pictures of vessels believed to be operating as "mother ships" for the pirates. the IMB warning can be found here:
http://www.icc-ccs.org/main/all_piracy_al.php

26 Aug More consolidation in the broker world as Aon purchases Benfield Group for GB£ 844 million.

27 Aug 8 African migrants are rescued from a lifeboat by a Maltese fishing vessel, a further 71 migrants are believed to have drowned after their vessel sank.

27 Aug Hurricane Gustav, the seventh named tropical storm of the season is gaining strength and appears to be headed for land fall on the United States Gulf region. New Orleans starts preparing for the worst as this latest storm looks set to possibly follow a similar path to Hurricane Katrina which hit the city on August 29 in 2005.

28 Aug Canadian Prime Minister Stephen Harper announces that all large vessels entering the Northwest Passage must register with the Canadian Coastguard prior to entry. This announcement is seen as an attempt to assert Canadian sovereignty rights over the area.

31 Aug Strange new type of Semi-Submersible vessel seen in Alicante - zoom into the link for a better view: http://maps.google.com/maps?f=q&hl=en&geocode=&q=alicante&ie=UTF8&t=k&ll=38.330954,-0.490187&spn=0.000757,0.001191&z=20&iwloc=addr

Disclaimer
Any opinion expressed in this newsletter should be regarded as the personal opinion of Jason Copland 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. North German Thumbs Down on Container Newbuildings?

Word reaches us from correspondents on the River Elbe that the Hamburg Shipowners ER are at the time
of writing said to be refusing to accept delivery of a container newbuilding in China on the grounds of technical deficiencies. More of these are in the pipeline from other owners and there is talk also of outright cancellations of orders. We wonder why there is no mention of these developments in the shipping press?

4. Quarterpoints

Your editor's most recent column in Lloyds List casts an eye or two on the regulatory and compliance environment in the London Market.......

Regulation and compliance

A new venture has taken me into the relatively unwandered byways of the London insurance market. A lifetime spent in the corridors of mutuals and the fixed price diversifications of club management companies has only partially prepared me for the realities of modern insurance regulation and compliance.

Like most people of my generation I come from a past which was on the whole quite lightly supervised. For large parts of the 1980s and 1990s, London insurance was famed for its entrepreneurial qualities, its regulators for their lightness of touch and many markets in Europe and abroad were seen as protected wards of national regulators anxious to avoid the paying away of local premium to foreign capitalists. In Europe the acceptance by the British government of the non-life insurance directives which were designed to liberalise markets were seen as a kind of trade off. If the DTI was prepared to intervene a bit more, the national markets in Europe would be required to open themselves to more competition within Europe. This being so, one can only express a certain disappointment that the penetration of Europe by the London insurance market has been something of a reverse process. Many of the players here have enjoyed the liberalisation of the market so much, they have taken up leading positions in the market. The non governmental barriers of language, law, culture and national affinity have not exactly perished in recent decades and the market in London is still terribly short of good people able to transact business in the non-Anglophone markets.

In recent times also, a new ethos of compliance and regulation has grown quite deep roots in the relatively shallow soil of laissez faire London. Anyone you talk to will grumble at the imperatives of regulation and compliance and there are now formidably large compliance departments in most brokers and insurance offices. When you speak to people at the operational ends of these companies, they mostly concede that things were so loose in the (loss making) past that a general tightening up was necessary. But they will also grumble, without much prompting about the other worldliness of the compliance routines, their disconnection from business reality and the depth of focus which is the modern face of regulation. The added cost to the business is often cited Also in a business where oodles of time is spent by individuals building up specialty skills and market experience, there is an unbecoming lack of reticence by managers to second guess their decisions. This tendency to second guess, which has proliferated in recent times is probably a symptom of decadence and decline--in a hardy economic and market climate, there is no sense and no money in layering decision makers over decision makers. In a really good operation or team, it is always better to field really good players and to live the excitements and regrets that this brings. Frequent second guessing in an organisation, like incessant audits and post mortems usually result in demoralisation and second rate bureaucracy where the protection of posteriors is taken as an adequate excuse for virtually anything.

Another feature of this walk of life is how little trouble is being taken to hide what is essentially a necessary evil from the customers and the people in the operational sides of insurance. Or to invest in the compliance side a lightness of touch, management and administration such as to ease the burdens on people trying to succeed in what are often very difficult market and competitive conditions. Modern life and modern insurance has a great deal more complexity built within it than was earlier the cause, but superior suppliers of insurance will want as little evidence of it as is possible so far as their markets are concerned. The basis of trust which underlies all long term insurance relationships is probably not particularly strengthened by heavy regulatory burdens. For whenever there is a bad scandal or insolvency you see the same shoulder shrugging from rating bodies, regulators and controllers-general who have not performed as the system promises. This is always a good moment to ask whether the rituals of compliance, the complex forms, the added costs of business, the slowing of response and the disempowerment of highly skilled brain workers produces a return of sufficient value. Something tells me the London market is not asking enough questions of this expanding new white collar activity--in many ways emblematic of the New Labour era--,nor measuring enough whether competitor markets are playing a reciprocal game or making gains on a tilted playing field.

5. Seascapes

Our inbox this week contains the rather handsome pdf newsletter from RTE One's Seascape. This autumn edition is packed with the sort of news that an island nation generates. Seascapes is published with the support of the Marine Institute, to widen knowledge and appreciation of the importance of the marine sphere in Ireland and is edited by the marine correspondent Tom MacSweeney

http://www.rte.ie/radio1/seascapes

6. And Finally...

Frazer Hunt looks like he is spoiling for a fight:--

When I got home last night, my wife demanded that I take her someplace expensive....

so, I took her to a Gas Station.....

And then the fight started....

********************************************************

After retiring, I went to the Social Security office to apply for Social Security. The woman behind the counter asked me for my driver's license to verify my age.

I looked in my pockets and realized I had left my wallet at home.

I told the woman I was very sorry, but I would have to go home and come back later.

The woman said, 'Unbutton your shirt'.

So I opened my shirt revealing my curly silver hair.

She said, 'That silver hair on your chest is proof enough for me' and she processed my Social Security application.

When I got home, I excitedly told my wife about my experience at the Social Security office.

She said, 'You should have dropped your pants, you might have got disability, too'

And then the fight started.....

*********************************************************

My wife and I were sitting at a table at my high school reunion, and I kept staring at a drunken lady swigging her drink as she sat alone at a nearby table.

My wife asked,' Do you know her?'

'Yes,' I sighed, 'She's my old girlfriend,

I understand she took to drinking right after we split up those many years ago, and I hear she hasn't been sober since.'

'My God!' says my wife, 'Who would think a person could go on celebrating that long?'

And then the fight started.....

**********************************************************

I rear-ended a car this morning, the other driver got out of his car and you know, how sometimes you just get soooo stressed and little things just seem funny?

Yeah, well I couldn't believe it.... he was a DWARF!!!

He stormed over to my car, looked up at me, and shouted, 'I'M NOT HAPPY!!!'

So, I looked down at him and said, 'Well, then which one are you?'

And then the fight started.....

P.S. More thanks to the House of Frazer Hunt for these aphorisms:-

Car salesman: Of course I¹m an honest man. it's one of the conditions of my parole.

If something goes without saying, let it.

I don't have stress, but I may be a carrier.

He's not such a bad guy, until you get to know him.

Careful? The man wears a belt and braces. With his pyjamas.

I've known this man through thick and thick.

I never drink unless I'm with someone or alone.

Life is one long process of getting tired.

I've got ulcers without being a success.

I only smoke after sex-I'm a 5 a year man.

The male body looks like it was designed by somebody who got fired that morning.

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