BOW WAVE 195

Warm Water Ports Edition

news and views on trade, insurance and risk

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(c)2003 WavyLine.com	Issue No 195 18 Aug 03
Published free of charge to Readers
Editor: Sam Ignarski
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In this issue:

1. Welcome
2. Russian Box Ports
3. New Book on Security
4. Swiss Re: All quiet on the Western Front
5. NY Blackout Claims--Expectations Low
6. And Finally...

1. Welcome

New Readers this week include:

Tim Ockwell, Partner, EuroPolicy Insurance Company in Moscow K.Chidambaram of K C Shipcare in Chennai, India
Willman Wong of North America Steamships Ltd in Vancouver N Miller of International Marine Insurance Agency in NZ Eric Denley,Brian Harris of Richmond University in Virginia, USA Janet Chan of brokers JLTAsia in Singapore
Perry Lim, Partner of Khattar Wong & Partners, Singapore Carl Gill of British Marine Managers Limited

Readers Write:

Arthur Chen (Chen Ding An) in Shanghai has written in with details of his new company:-

Worldwide Survey Ltd

As one of the rare exceptions made by the Chinese government and the China Insurance Regulatory Commission (CIRC). Worldwide Survey Ltd. is licensed to provide the following services:

Represent shipowners, hull underwriters, P&I Clubs in respect of investigations to cargo and ship damage, and claim settlement.

Shipping and marine consultancy services on Chinese maritime law and procedures of marine litigation;

Arranging competent surveyors, particularly unique in providing pre-loading surveys on agriculture products such as ground nuts and bagged rice, etc. to assist master and ship owner in preventing and taking precautions against any potential cargo claims.

Ship Purchase Survey; Classification Survey Consultation; Damage Survey; On-hire/Off-hire Survey; Insurance Survey; Loading/Unloading Survey; On Site Inspection

Recommending and retaining suitable marine counselors to work on amicable solutions in accordance with interested parties' requirements.

Contact him at:

Arthur.chen@cnsurvey.com

Capt. Trevor Bailey is getting into security:-

I am delighted to inform you that YG Consultants have now received formal MCA approval for our Ship Security Officer training programme. Company and Port Facility Security Officer training programmes have been developed in line with the recommendations of the draft IMO Model Courses and with the UK MNTB / MCA and TRANSEC guidelines and will be available very shortly.

At the current time, we have a number of courses arranged and there are a number of spaces available on each of these courses. Readers interested in attending these courses should please contact me for further details.

Contact him at:

trevor.bailey@ygyg.com

This edition of Bow Wave comes on the eve of your editor's departure for a short break. The next two editions of Bow Wave will appear under the guest editorship of Sharon Cunningham and David Cheslin who have kindly agreed to act. Readers may expect something different.

Enjoy.

2. Russian Box Ports

Your editor's most recent Quarterpoints column in Lloyd's List examined recent moves in Russia:-

Many years in the worlds of insurance and transport have persuaded me to see in the patterns made in the container industry the trend of visible commerce in the world and the tendency of aspiration and prosperity in any given place. Although these industries are traditionally classified by economists as part of a country's "invisible" earnings, they are in fact as close to the oily rag that many of us are likely to live in the post modern world.

For at the heart of the process there are not electrons moving at rates of nano-seconds around the planet but large assemblies of atoms moving reliably if a little ponderously from shippers to receivers via the great safe cheap services of the box industry. It is possible to see the modern commercial world as bounded within a great triangle with the United States, Western Europe and the Western Pacific forming the points. Those within this triangle are prosperous or aspiring to prosperity in conditions of growth and optimism. Those outside are struggling.

Where to place Russia in this picture? A new company National Container Company, much in the news of late, has just acquired a 50 per cent controlling stake in the Vladivostok Container Terminal in the Russian Far East as part of its plan to create "the first all-Russia network of container terminals, starting with the development of the first Container Terminal in St. Petersburg". Russia has always been to this writer a most peculiar transport economy.

In the old centrally planned days, the vast railway network would swallow containers into the system, which already was running at full capacity, and release them at the various railheads in the country in port cities like Odessa, Leningrad, and Vladivostok. If you were a shipowner under the Morflot system of containers, you had to put one into the system to get one out. This bottleneck at the ports ensured that the ocean containers did not spend their entire careers locked into land transit within the old Soviet Union. A surprising number did, although the same could be said of the stock of ocean containers which circulated, somewhat sluggishly around the US intermodal economy. Road Haulage was also in the old marxist-leninist days like many things a scarce commodity over any distance short or long haul, although the absence of East West trunk lines meant that
long haul between eastern and western Russia was a rail only option.

The figures quoted recently for the Russian containerised economy reflect the historic scarcity of ocean frontage for the country as a whole. They also disclose that there is a long way to go for the economy.
The country's major seaport in St Petersburg shows just 360 899 TEUs handled in the last reported year of 2001, and the joint venture with P&O in Vostochny, which began in the mid 1990s reports 134 444 TEUs. The Country's Baltic Ports handle 74 per cent of international traffic, the Far East Ports account for 17 per cent and the Southern Ports 7 per cent. About a third of all imports into the country are containerised and only 6 per cent of exports. Although box traffic growth is predicted to rise by 8 to 12 per cent each year for the foreseeable future, these are not startlingly large flows of goods. By these standards, the hopes that the Trans Siberian land bridge will one day be a logistics path for Pacific shippers to conjure with seem destined to be disappointed. Unlike the torrent of goods passing down the Pearl and Yang tse rivers into modern international commerce, the export products of Russia are most likely to remain primary goods, the traditional wealth upon which the country has always depended.

One wishes the sponsors of the National Container Company only good things in their quest to put the country on the modern container map. It is an undertaking which was more or less beyond the abilities of the central planners. Great was the neglect of port infrastructure in all the former Comecon economies, but greatest of all was the neglect of the containerised parts of the waterfront. There small volumes were handled, without liability by government owned stevedoring companies whose employees were frequently indifferent to the finer points of operations when not actively drunk. Those who follow the fortunes of the New Russia and her economy could do worse than to keep an eye on the port turnover figures. They can only get larger, but the question really is how fast.

3. New Book on Security

Bruce Schneier, one of the sanest security experts around has just published a new book called Beyond Fear--Thinking Sensibly About Security in an Uncertain World.

He decribes the book this way:-

"This isn't a book about computer security; it's a book about security in general. In it I cover the entire spectrum of security, from the personal issues we face at home and in the office to the broad public policies implemented as part of the worldwide war on terrorism. With examples and anecdotes from history, sports, natural science, movies, and the evening news, I explain how security really works, how it fails, and how to make it effective.

If I can name one overarching goal of the book, it's to explain how we all can make ourselves safer by thinking of security not in absolutes, but in terms of trade-offs -- the inevitable expenses, inconveniences, and diminished freedoms we accept (or have forced on us) in the name of enhanced security. Only after we accept the inevitability of trade-offs and learn to negotiate accordingly will we have a truly realistic sense of how to deal with risks and threats.

This is a book for everyone. I believe that security, as a topic, is something we all can understand. And even more importantly, I believe that the subject is just too critical, too integral a part of our everyday lives, to be left exclusively in the hands of experts. By demystifying security, I hope to encourage all of us to think more sensibly about the topic, to contribute to what should be an open and informed public discussion of security, and to participate vocally in ongoing security negotiations in our civic, professional, and personal lives.

Read about it at:

<http://www.schneier.com/bf.html>

4. Swiss Re: All quiet on the Western Front

Commentator Ronald Gift Mullins has been at work again describing a recent event held by Swiss Re in New York seemingly vested with all the dynamism of August:-

New York, NY August 7, 2003: We are loath to disparage Swiss Re's press briefings/forums because the reinsurer treats the media with considerable care and concern, and serves up a very elegant breakfast as well. Nevertheless, the content of the recent briefing, Managing Risk in Turbulent Times, unfortunately was only as substantial as the most airy of soufflés.

While we applaud Swiss Re for its courage and determination to hold these periodic briefings for the media and financial analysts, there is such a sterility to the meetings and a paucity of significant news coming from them, that the company may well consider thoughtfully evaluating whether they are worth the substantial energy, coordination and expense required to stage them. Or hold them only when there is something of real import to impart. This briefing earns 3 POLIES out of a possible FIVE.

Read about it at:

http://www.insfolks.com/articles.php?cmd=1

5. NY Blackout Claims--Expectations Low

The first insurance implications of the world's largest blackout event in the United States have been
examined by the admirable Insurance Information Institute in the on-line Insurance Journal. The item reads:

August 15, 2003

Based on past experience, the insurance implications of the Northeast blackout are likely to be modest, according to the Insurance Information Institute in New York. No specific dollar figure was available as of Thursday evening.

Authorities are saying that the blackout will be of limited duration. Most commercial insurance policies exclude damage or impacts from power failures, but there is potential insurance coverage for homeowners, such as from food spoilage. However, this type of loss typically would fall below the average homeowners' insurance deductible, according to the I.I.I.

In 1977, a two-day blackout in metropolitan New York resulted in $2 million in insured losses. However, civil disorder associated with the blackout caused significantly more damage, totaling $28 million. The 1965 Northeast blackout resulted in minimal insured losses.

"If authorities are right that this blackout will only last a few hours, it will cause lots of inconvenience, but not significant insured losses," said I.I.I. Vice President P.J. Crowley.

http://www.insurancejournal.com/news/newswire/national/2003/08/15/31512.htm

6. And Finally...

Many thanks to David Cheslin for these propositions:

One nice thing about egotists: they don't talk about other people.

There are three ways to get something done: do it yourself, hire someone, or forbid your kids to do it.

Children seldom misquote you. In fact, they usually repeat word for word what you shouldn't have said.

Vital papers will demonstrate their vitality by spontaneously moving from where you left them to where you can't find them.
If at first you don't succeed, skydiving is not for you.
The trouble with doing something right the first time is that nobody appreciates how difficult it was.

We can sympathize with a child who is afraid of the dark, but the truth is that most people are afraid of the light.
Employ teenagers - while they know everything.

Age is a case of mind over matter. If you don't mind then it really doesn't matter.

If a man speaks in the forest, and there's no woman to hear him...is he still wrong?

PS from rail guru Bryan Stone:

Old Enoch from Wednesbury was persuaded to take a holiday, in Rhyl. Everything went well until two days before he was to come home, when he collapsed and died.

His friends had the body sent home by train, so that it could - as was the custom - be laid out in the parlour for neighbours to pay their respects. Ena und Ada, the two old ladies down the street, came in. Ena, sympathetic, said: ' Ay, look, what a lovely colour 'e's picked up'.

'Ar', said Ada, ' You can see as 'ow 'is 'oliday done 'im good'.

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