BOW WAVE 615

Bow Wave Issue 615--Autumn is Here Edition

news and views on trade, insurance and risk

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(c)2011 WavyLine.com	Issue No 615 31 Oct 11
Published free of charge to Readers
Editor: Sam Ignarski
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In this issue:

1. Welcome
2. Lloyd's List Viewpoint
3. Reefers from Vietnam
4. Tropical Island Super Yacht
5. Terminal News from China
6. And Finally...

1. Welcome

Poem of the Week

You shall above all things be glad and young...

you shall above all things be glad and young
For if you're young, whatever life you wear

It will become you;and if you are glad
whatever's living will yourself become.
Girlboys may nothing more than boygirls need:
i can entirely her only love

whose any mystery makes every man's
flesh put space on;and his mind take off time

that you should ever think,may god forbid
and (in his mercy) your true lover spare:
for that way knowledge lies,the foetal grave
called progress,and negation's dead undoom.

I'd rather learn from one bird how to sing
than teach ten thousand stars how not to dance

e.e. cummings

New Readers this week include:-

Maritime forecaster Alan Goldman
Communications manager Sheila Armstrong of ISS
Capt. Suresh Khurana of Pacific Ship Management in Mumbai Chris Horrocks CBE
Researcher Yumi Hiraide of the Japan Assn of Marine Safety Jenny Boland of the Sailors' Society

News of Readers

Paola Dell 'Olio has joined JLG Maritime in Athens. She is an Italian national and a maritime lawyer by training having qualified in England. The firm has acquired a very international flavour and now has staff of Greek, Russian, Chinese, Australian, Italian, English and Welsh extraction.

mailto:jlj@jljmaritime.com

The Naval Ship Classification Association (NSCA) has elected Lorenz Petersen, Germanischer Lloyd's Business Segment Manager for Navy Vessels, as Chairman of the Association, at their annual general meeting in Rome.

The NSCA is the naval counterpart of the International Association of Classification Societies (IACS). It represents the classification societies to NATO and at the International Naval Safety Association (INSA), a body made up of representatives from both navies and classification societies, which functions as a naval equivalent to the IMO (International Maritime Organization).

FOB Update

Many interesting people are joining FOB and we are glad to see the rate of joining is accelerating. We are up to 2093 joiners. Perhaps the site is acquiring critical mass.

You can see who is joining FOB by country and by occupation by using the search windows on the People page, the most popular page on the site, which does bear a passing resemblance to another well known and much more generalist networking site. One plea we make to members is that they supply a picture and a little background so people can put a face to a name.

Some new groups are in process and we are encouraging people to post to the groups and to use the discussion boards. You can also comment on individual news items.

FOB is also very useful for Bow Wave as a place where we can lodge large documents, pictures and videos. The vagaries of corporate firewalls do not allow us to post any attachments with the zine, so a link over to FOB is doubly useful to us.

Registration is gratis for individuals. Businesses can take out a page for a small supporting contribution and we welcome firms prepared to sponsor Group pages or advertise with us. This helps to keep FOB a going concern and puts a smile on the face of our programmers and accountants..

FOB is a project designed to adapt the new ways of using the internet for the sorts of people who read Bow Wave.

You are welcome to join

http://www.fobnetworking.com

Note from the Editor

Greetings from dark, clocks back, England, where the days draw in from around half past three in the afternoon and reading lamps are switched on after lunch.

We attended the IMIF Annual Dinner this week, itself a kind of autumnal herald, and learned the new mantra from Jim Davis. It is a good time to recall that it is best to scrap one old ship before building a new one and indeed one being scrapped, the new one should be a clean,lean, green, energy efficient machine.

Enjoy!

2. Lloyd's List Viewpoint

A recent column by your editor tells you all you might possibly need to know about the peculiar risks of containers, those standardised ubiquitous objects which have helped to make the modern world. Sumus quod sumus as they used to say in Rome:-

Container Claims

The recent passing of George Fawcett, the highly competent and well liked former equipment claims manager for the TT Club prompts me to revisit the not altogether smooth pairing of marine insurance and shipping containers and the principles that George used in his daily life adjusting the claims traffic for objects usually worth no more than $2000 each.

Clubs usually flourish in areas of industrial or commercial life which are deemed "too difficult" by fixed premium insurance companies. Certainly the TT Club fits this pattern, for when containers began to be introduced into shipping in the early years, even the P&I Clubs were not sure they belonged within their portfolios. Indeed, at the beginning, the TT Club dealt with the P&I liabilities arising out of the operation of containers

When the time comes for a grand consolidation of P&I--if it ever does--it may be that one or two Clubs would suffice to deal with the remaining P&I exposures of the container trades.

The principles which are the most crucial in this rather specialized area boil down to a short list:-

(i) The use of a sensible deductible drives the long term soundness of any container insurance. Once upon a time, buckets of money were lost by commercial underwriters insuring the maintenance and repair programmes of leasors and operators. Deductibles between nil and $25 dollars per accident led to terrible administrative wars and red numbers. After losing large amounts of time and money, underwriters in markets like Lloyd’s were only too happy to see container insurances scoot over to the TT Club, which never offered less than a deductible of $ 500 each accident. Today a large container operator would probably be happy to carry a deductible of say $1million each accident, in practice a long stop insurance for a major sinking or salvage loss.

At the same time the way deductibles are applied and adjusted is a thing of skill. Deductibles in this form of insurance take various forms, they can be per trip, per round trip, per round the world voyage, each accident, each container or each cause. An old container can have an outer skin which shows a lifetime of bumping and scraping. An each accident deductible and careful inspection and documentation will ensure that it will not become a Constructive Total Loss for the account of the insurance underwriter

(ii) the concert of repair costs, so often in the past an out of control flood of loss for insurers is controllable using good IT (including good hand held devices) and also by commissioning only one or two contractors to inspect all the containers on risk for damage claims. I can remember the time when George Fawcett introduced an inspection programme for damage to container claims which paid the adjusting companies as little as $25 per box inspection, bringing to an end decades of much higher costs.

(iii) Making short work of constructive total losses requires a strange mixture of technical knowledge and gracious claims handling. According to George Fawcett, immerse a container in seawater for any length of time and it is a write off. A collapsed stow, perhaps on board one of the less than ideal feeder ships used in the container industry, produces many marginal cases for decision. Speed and settlement produced far better results than technical precision.

(iv) The growing scale of containerisation, more or less a feature since the beginning means that in some cases the costs of general average and salvage, once almost an afterthought in a container damage cover, has risen tremendously as the size of ships has waxed. Historians of the container industry should be able to piece together quite a picture of modern life from the laborious transfer ashore of all the containers on the MSC Napoli, the meticulous noting of contents and the high overall costs of carrying out the wreck removal.

(v) Unlike most forms of liability insurance, the insurance of container hulls in the employ of operators produces a positive form of IBNR (incurred but not reported claims costs). Instead of the ultimate claims position deteriorating for box underwriters, it tends to get better by reason of the recourse claims which container owners pursue against ships which have produced losses overboard or collapses of stow or toppled stacks ashore by reason of high winds. Thus a good team of adjusters includes at least one practiced hand who knows how to pursue these kinds of recourse claims.

(iv) Understanding and supporting good stowage of containers on board ships is key to good underwriting practices and warranties. Today and always, people tend to be transfixed by the gargantuan and latest container ships when they think about the industry, not realizing that there are many more less suitable, more aged ships feedering into the great main haul ports of the industry. These craft have the tendency to suffer more losses of stow and more navigational troubles. Many a claims man in this field has had the education provided by a converted bulker suffering a collapse of containers within the hold.

The bland, banal, mundane ISO container is a canvas for many modern notions. It is still a herald of industrial and commercial revolution, a cloak for the fraudulent, a lightening rod for IT , computing and accounting standards and enhancement, a hiding place for illegals, terrorists and contraband runners. The aggregation of containers onto ever bigger ships and into ever larger ports means that the catastrophe risk continues to grow for the underwriters of containers and their cargo. Yet at the same time, container operators keep growing by way of bank finance and takeovers to the extent that more and more world trade is carried by fewer shipping companies. This present s a ticklish situation for those insurers who still insure boxes. Consolidation, the life force of modern life in general and container shipping in particular poses large risks and catastrophes, but economies of scale ensure that all the costs to the business, including insurance premiums are in more or less regular decline.

http://www.lloydslist.com

3. Reefers from Vietnam

Messrs Avalon, specialists in the insurance of transport risks in the US, have published this story in their Quest publication:-

Potentially explosive containers disrupt West Coast port operations
Ports in the West Coast are increasing safety procedures after multiple Vietnamese refrigerated containers exploded and killed three dockworkers in Vietnam and Brazil.

Contaminated gas in the container’s cooling units likely caused the explosions. The Pacific Maritime Association (PMA) noted that these containers were processed in the port of Kat Lai in Vietnam. MSNBC reports that about 8,000 of these containers could be in circulation.

Now, any refrigerated container transported through or originating in any Vietnamese port will be identified upon arrival in the United States. Any container from Kat Lai will be isolated for special handling.

The PMA is working with the International Longshore and Warehouse Unio (IWLU) to protect workers while keeping the ports in operation. During the past few days, the IWLU refused to work certain vessels until a complete history was provided. The IWLU is insisting that "any dangerous containers be identified and removed from circulation before another person is killed."

As a precaution, several carriers removed hundreds of containers from circulation that underwent refrigeration repairs in Vietnam this year. The U.S. Coast Guard is also working with shippers and port officials to identify any faulty containers and ensure they are safe.

http://www.avalonrisk.com

4. Tropical Island Super Yacht

We are indebted to Steve and Maggie White for news of this new conceptual line in yachts, also known as floating islands.

The one which catches the eye is called Tropical Island Paradise.

The drawings show an island built upon a yacht. They are by UK-based yacht design company Yacht Island Designs, evidently blue sky thinkers.

The design is inspired by tropical islands, with huts, a pool and a whole volcano that is sure not to erupt. Since this is a yacht, it comes packed with special VIP rooms, arcades, gym, lounges, spas and even a helipad. The volcano adds a lot of beauty to the whole look of the yacht, it also happens to have water flowing out of it onto the pool creating a sort of river complimenting the tropical look.

The back of the yacht has a retractable beach deck where structures float on the sea making the sea accessible to swim in and of course grant access to various water activities such as wake boarding and jet-skis.

With all the hot money there is in the world, valiently trying to evade the famished tax collectors of the various states, who is to say that these ideas will never see the spray of salt?

To get the idea, go to:-

http://www.yachtislanddesign.com/concepts/

5. Terminal News from China

From the latest edition of David Lammie's excellent Yangtse News

**Sinotrans Wuhu terminal project gets MOT approval

The Sanshan terminal project west of Wuhu city centre on the Yangtze River has recently been approved by the Ministry of Transport. The project, covering a total shore length of 662 metres, involves the construction of two 10,000dwt berths for bulk and breakbulk and two 10,000dwt multi-purpose berths with a handling capacity of 2.43m tons of general cargo and 68,000 TEU.

According to the official announcement from the provincial government, the project will be built and operated by Sinotrans Sanshan Terminal Company with a total investment of Rmb650m. Building work is expected to start within the year and should be complete by 2013.

In late September, Sinotrans announced an agreement with Keppel Telecommunications and Transportation to inject Rmb134m and Rmb140m respectively to make the terminal a 50-50 joint venture. The joint venture marks Keppel T&T’s first investment in Yangtze ports; it has an existing partnership with Sinotrans in Lanshi, in Foshan, Guangdong province.

**Water level reaches 175 metres at Three Gorges Dam

At 5:00pm on 30 October, the water level at the Three Gorges Dam reached its maximum of 175 metres for the second time in history, according to official reports.

From now onwards, water will be released as and when necessary to alleviate drought conditions in the middle reaches of the Yangtze until around next April when the water level will have dropped to 145 metres, ready for the new flood season.

**Shipping suspended in lower reaches due to heavy fog

Heavy fog affected the lower reaches of the Yangtze River in the early hours of 1 November.

Maritime safety authorities in Nanjing, Zhenjiang and Taizhou suspended shipping at one point to avoid accidents. Nanjing reported a visibility of some than 200 metres while it was no more than 50 metres in Taizhou.

**SIPG post reports 9.5% drop in Q3 profit

Shanghai International Port Group announced a fall in net profit of 9.52 per cent year-on-year to Rmb1.18bn in the third quarter of 2011. China’s largest port operator said it was affected by increases in both depreciation and financial cost resulting from its acquisitions of the second and third phases of Yangshan deepwater terminal.

The port operator recorded Rmb16.14bn in revenue in the first nine months, 14.7 per cent more than in the same period of last year.

In addition to its interests in Shanghai, SIPG has recently been investing heavily in fast-growing ports in all sections of the Yangtze River. In the middle reaches, it has taken controlling stakes in the largest port operators in Wuhan and Jiujiang, while in the lower reaches it has strategic alliances with Nanjing and Taicang ports. In Chongqing, it is building a new container terminal as a majority shareholder.

mailto:info@yangtzebusinessservices.com

6. And Finally..

Merci Paul Dixon

An elderly woman had just returned to her home from an evening of religious service when she was startled by an intruder. As she caught the man in the act of robbing her home of its valuables, she yelled, "Stop! Acts 2:38!" [Turn from your sin]

The burglar stopped dead in his tracks. Then the woman calmly called the police and explained what she had done.

As the officer cuffed the man to take him in, he asked the burglar,"Why did you just stand there? All the old lady did was yell a scripture at you."

"Scripture?" replied the burglar, "She said she had an axe and two 38s!"

P.S.

A Scotsman, carrying a huge suitcase, has been riding a London bus for five miles along its route, all the while attempting to avoid the ticket collector. Finally, the conductor manages to corner him and tells him to pay up.

"You've been on for five miles--that'll be 50p, please, and 10p for your suitcase."

The Scotsman responds, "I ha'not, I want a ha'penny fare, just got on this vera moment."

They begin to argue, and the ticket collector becomes more and more enraged, and finally, as the bus is passing over London bridge, he grabs the Scotsman's suitcase and hurls it out of the bus. It lands in the river and sinks without a trace.

The Scotsman stands shocked for a moment and says to the ticket collector, "Not only are ye tryin' to overcharge me for the ticket--but now ye've gone an' drowned me boy Angus!"

Flying. Those were the days.....

http://www.howtobearetronaut.com/2011/11/a-day-on-a-flying-yacht-1950/

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