BOW WAVE 492

Bow Wave Issue 492--Hot Box Edition

news and views on trade, insurance and risk

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Wavy Line	sam@wavyline.com
(c)2009 WavyLine.com	Issue No 492 20 Apr 09
Published free of charge to Readers
Editor: Sam Ignarski
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In this issue:

1. Welcome
2. Quarterpoints for April 2009
3. Hot Box Memories
4. Trailer Market Not Good
5. JIT Policies
6. And Finally...

1. Welcome

Poem of the Week

Field Guide

No one I ask knows the name of the flower
we pulled the car to the side of the road to pick and that I point to dangling purple from my lapel.

I am passing through the needle of spring
in North Carolina, as ignorant of the flowers of the south as the woman at the barbecue stand who laughs
and the man who gives me a look as he pumps the gas

and everyone else I ask on the way to the airport to return to where this purple madness is not seen blazing against the sober pines and rioting along the roadside.

On the plane, the stewardess is afraid she cannot answer my question, now insistent with the fear that I will leave the province of this flower without its sound in my ear.

Then, as if he were giving me the time of day, a passenger looks up from his magazine and says wisteria.

Billy Collins from Questions about Angels (1991)

New Readers this week include:-

Claims Manager Ike Barbatsoulis of the Chubb in New Jersey Willman Wong of Aon in HK
Bill Davis of Wells Fargo Insurance Services in Seatlle James Booker of Brokers CTX-Risks

Readers Write

From Pat Gardiner in Felixstowe

The story I have been working on every day for the past NINE years is finally breaking, mostly in the US, where I’m in touch now and getting some support from journalists, scientists and lawyers working in the same area.

To put it simply, I’m exposing the source of the superbugs plaguing our hospitals. Funny thing life, I never expected to do anything so important or unexpected.

You gave me a crucial helping hand a couple of times, so this is a tip that the story will break. It has big implications obviously for insurance but also aviation and the cruise business as you can see. The Class Action Lawyers are gathering across the pond.
Put "st398" into google

You can find the most up-to-date stuff from me on

http://animal-epidemics.blogspot.com/
I don’t pretend to be a journalist and only got involved because the government vets made me angry and outraged.

I think I have finished up doing something pretty creditable by mistake.

Contact Pat at:-

patgardiner@btinternet.com

Note from the Editor

Quite a mix of stories this week plus a quite worrying story from long term Reader Pat Gardiner, a man who does not like being messed around by officialdom.

Enjoy!

2. Quarterpoints for April 2009

Your editor's latest column in Lloyd's List asks what lessons are to be learnt when Clubs go a-regionalizing:-

Regional is as regional does

SOP, the small ship’s P&I Club has recently announced it is opening a branch in Singapore. The idea is is to serve the Club’s many Members and their brokers in the Asian region. Initially serving the membership in Singapore, Malaysia, Thailand and Indonesia it is intended that the branch will eventually extend its sphere of operation into other countries in Asia as well. The Club says Asia is now one of the its largest operating areas with over 500 Members and nearly 5000 entered vessels representing around 25% of the total tonnage entered in the Club.

What catches the eye is that this once highly centralized organization which has always had good simple systems designed to deal with low unit premiums and high volumes has decided it is worth its while to regionalize its operation with an office in Vancouver and Singapore as well as London, delivering claims and underwriting services to the regional membership. The Singapore office is said to represents the final step in the implementation of the Club’s strategy to provide a truly global service for the membership, segmented into three 8 hour time zones. In other words there is always an office open somewhere in the world able to respond.

I have very good memories of embarking upon such a strategy many years ago myself, when I took myself off to Hong Kong to spread the word for a well known intermodal insurer. Here in no particular order are the impressions I carried away from the experience and some advice for the new SOP officials in Singapore, Messrs Randall and Heaselden.

The best management model is to imagine SOP as a regional company as one long corridor along which which each manager works, subject to targets, reporting obligations and peer review which feed into a plan which has been arrived at after plenty of thought and input. If it would be embarrassing professionally to second guess a colleague next door in London, it remains so for the fellow hard at work in Singapore.

Regular three way management meetings will help keep the show on the road. Learning how to meet by video conference is worth the effort. The preparation of agendas and progress charts will help to calm any sense of unease.

Thinking globally and acting locally is not cant--there are things which come from the long history of the SOP which are essential to the essence of their business--there are other things which are locally unremarkable but which grate on the London nerve. I found it very difficult to watch the rather harsher style of claims handling I found locally in Hong Kong, but I learned that this school of hard knocks was widely understood.

Making service overseas in one of the regional offices an essential stepping stone to senior management will equip the business well for the future. In their day the average adjusters of Richards Hogg were probably the most sophisticated marine executives in the industry--each senior manager had spent time somewhere out in the marketplace close to customers. They learnt empathy.

Technically, modern computing should support regionalized approaches quite well. Gone are the days when bandwidth and mainframe systems rooted a business in a single place and limited the ease with which all systems could be distributed.

Accept that the old ways are over and a new kind of organization better connected to markets and clients will emerge over time.

3. Hot Box Memories

Having cause to research the problem of hot box derailments this week, we noted how the people of Mississauga continue to remember the large evacuation of the city's population caused by a a train carrying tanks of hazardous cargoes. This year there is even a 30 year anniversary exhibition. See the interesting links below:-

http://en.wikipedia.org/wiki/1979_Mississauga_train_derailment

http://www.mississauga.ca/portal/residents/localhistory?paf_gear_id=9700018&itemId=5500001

http://www.peelregion.ca/heritage/hot-box.htm

4. Trailer Market Not Good

From the excellent zine devoted to the commercial motor trade called Transport News Brief abnd edited by Robin Dickeson comes this unhappy story:-

Trailer market collapse

Europe's leading trailer maker, Schmitz Cargobull says the European trailer market has collapsed. The firm says registrations are down "drastically" and trailer makers have seen orders drop 94% in the first quarter of the year. The firm goes on to say that it doesn't expect a quick recovery. On the back of this gloomy outlook it plans more cuts to costs, output and jobs. It expects sales to be "between 70 and 90% down" for the year, saying this would be equal to an annual production of 10,000 units. The firm built 66,000 in its record financial year 2007/2008. It has stopped work at one of its two UK plants and at one in Lithuania, will not renew 350 temporary jobs and expects to cut 500 permanent jobs but will retain 180 trainees. The firm's senior staff will contribute part of their pay to a fund to help colleagues hit by the cutbacks. Despite this "the financial position of the company is solid due to the permanent re-investment of profits," according to Ulrich Schümer, the firm's finance chief.

mailto:rdickeson@transportnewsbrief.com

5. JIT Policies

This item appears in the Downwind e-letter issued by Henry Tours who is an aviation claims man in South Africa:-

INSURERS IN DANGER

Many insurers, especially of the aviation extraction, face possible loss of defences against dodgy claims by being unable to comply with the SA laws relating to timeous issue of policies. If the insured hasn’t had a policy, the insurer will have grave difficulty in trying to enforce exclusions and warranties. SA law is very explicit--a policy has to be issued within 30 days of the commencement of the risk. In aviation, a new policy is issued every year but some insurers still try to rely on the fact that their insured got a policy last year and they haven’t changed the clauses so they think they can rely on this even though they have made no effort at all to issue the current policy. It’s a new contract.

I am sure that many attorneys will little difficulty in squashing that one.One insurer, when challenged over outstanding policies is known to have said "We’ll issue it when the claim comes." With that sort of attitude they will get scant sympathy in the courts or the Ombudsman’s offices. There shouldn’t be a problem at all-- an aviation policy is a pretty standard document which has a number of clauses added to it depending in the risk. Any half-way competent computer nerd could put together a programme that would enable a policy to be issued in 10 minutes flat. I’ve tried it and it is dead easy.

(not if you are using the London Market Contract Certainty Form it isn't--ed)

mailto:htours@mweb.co.za

6. And Finally...

A large crop of military and aviation maxims this week thanks to the House of Frazer Hunt

WISDOM - FROM THE MILITARY MANUAL

Infantry Journal

"It is generally inadvisable to eject directly over the area you just bombed."

U.S. Air Force Manual

"Whoever said the pen is mightier than the sword obviously never encountered automatic weapons."

- General MacArthur

"You, you, and you ... Panic. The rest of you, come with me."

- U.S. Marine Corps Gunnery Sgt.

"Tracers work both ways."

- U.S. Army Ordnance

"Five second fuses only last three seconds."

- Infantry Journal

"Any ship can be a minesweeper. Once."

"Never tell the Platoon Sergeant you have nothing to do."

- Unknown Marine Recruit

"If you see a bomb technician running, keep up with him."

- USAF Ammo Troop

"Though I Fly Through the Valley of Death , I Shall Fear No Evil. For I am at 80,000 Feet and Climbing."

"You've never been lost until you've been lost at Mach 3."

- Paul F. Crickmore (test pilot)

"The only time you have too much fuel is when you're on fire."

"If the wings are traveling faster than the fuselage, it's probably a helicopter -- however, it's probably unsafe in any case ."

"When one engine fails on a twin-engine airplane you always have enough power left to get you to the scene of the crash."

"What is the similarity between air traffic controllers and pilots? If a pilot screws up, the pilot dies; If ATC screws up, the pilot dies."

The three most common expressions (or famous last words), in aviation are:

"Why is it doing that?"

"Where are we?"

And

"Airspeed, altitude and brains.

Two out of three are needed to successfully complete the flight."

"Mankind has a perfect record in aviation;

We never left one up there!"

"Flying the airplane is more important than radioing your plight to a person on the ground incapable of understanding or doing anything about it."

"The Piper Cub is the safest airplane in the world; it can just barely kill you." - Attributed to Max Stanley (Northrop test pilot)

"There is no reason to fly through a thunderstorm in peacetime."

Sign over squadron ops desk at Davis-Monthan AFB, AZ, 1970

"If something hasn't broken on your helicopter, it's about to."

"You know that your landing gear is up and locked when it takes full power to taxi to the terminal."

As the test pilot climbs out of the experimental aircraft, having torn off the wings and tail in the crash landing, the crash truck arrives; the rescuer sees a bloodied pilot and asks,

"What happened?"

The pilot's reply: "I don 't know, I just got here myself!"

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