The UK Chamber of Shipping, which represents interests controlling 860 ships of about 23m tonnes, announced today that it is backing a global and open emissions trading scheme for shipping.

“This is a bold and far-reaching decision that gives a lead to the rest of the shipping world,” said Chamber president Martin Watson “The UK industry recognises that shipping, which carries 80 per cent of all world trade goods – and 90 per cent of the UK’s trade – must make a significant contribution to the battle to reduce mankind’s carbon emissions. “The carbon cost of carrying a ton of freight by ship is 10 times less than by road – and 100 times less than by air. Shipping is by far the most carbon-friendly transport mode. However, because so much freight is carried by sea, shipping does produce nearly three per cent of total emissions. We need to take whatever action is needed to try to limit those emissions – but without accidentally causing freight to be shifted from ships to other, less carbon-friendly forms of transport. That would be catastrophic in terms of total emissions.”

The move has been welcomed by Peter Lockley, head of transport policy at environmental group WWF-UK. “I’m very pleased that the UK shipping industry is advocating an emissions trading system for ships and I look forward to working with them to refine and build support for the proposal. If designed well, the scheme would put a price on maritime carbon emissions, speeding up the drive for cleaner ships and helping to pay for low-carbon development in poorer countries. It would position shipping as a progressive and responsible industry, and I very much hope that it will be part of a global climate change deal next year in Copenhagen.”

“The Chamber’s move is very much in line with the UK Government’s policy in the Climate Change Act adopted last month and the “carbon budget” recommendations published by the Climate Change Committee two weeks ago,” said Mr Watson.

“Although an emissions trading scheme for the shipping industry remains a concept rather than a defined path (and many parts of the global industry are still to be convinced that this is the best course of action), we believe that the industry – if it wishes to remain in control of its own destiny – must decide upon a direction of travel and strive to deliver it. I believe that if we can provide leadership and make a coherent and compelling case then other national associations will follow and that this will empower our parent body – the International Chamber of Shipping – to adopt a robust and convincing position in the vital international negotiations ahead of the Climate Change Conference in Copenhagen in December 2009.”

The piracy crisis in the Gulf of Aden has prompted specialist marine trade disruption insurer Transmarine to launch an insurance policy that will protect the charterer’s cash flow in the event of piracy.

Transmarine, managed by Michael Else and Company, says that the extra cover for charterers is available as a standalone product for charterers as an extension to the existing Transmarine policy.

It says: “The insurance responds to indemnify the charterer’s liability to continue to pay hire to the shipowner in circumstances where the charterer is deprived of the use of a chartered vessel due to an act of piracy. This cover is specifically targeted at vessels trading internationally and transiting the Gulf of Aden.”

The company notes that although the incidence of pirate attacks in the Gulf of Aden has risen sharply over recent months many shipowners are still prepared, or compelled commercially, to transit the Suez Canal and the Gulf of Aden.

It notes: “It is a widely held view that under a standard form of NYPE charterparty an act of piracy is not an off-hire event. Charterers have had limited success in negotiating amendments or inserting additional clauses that would make piracy an off-hire event; but such clauses are not finding favour with the shipowners at present. As a result many charterers have ships transiting this high risk region, where if the vessel was to be attacked by pirates and they lost the use of her as a result; they would still have to continue paying hire to the shipowner. Vessels are now routinely being hijacked by pirates and sometimes being detained for as long as two or three months prior to being released. The liability to continue paying hire for this length of time represents a real financial risk to the charterer."

Michael Else and Company's managing director, Christopher Else, says: “Piracy in the Gulf of Aden has become a very real problem, and not just for the shipowner. In these difficult times the last thing any charterer wants is a liability to pay hire to the value of several hundred thousand, or even millions of dollars, whilst the vessel he has chartered is sitting idle.”

Last week’s Wall Street Journal highlighted the prominent role being played by London’s maritime lawyers in the ongoing piracy crisis. The piece features an interview with Toby Stephens of Holman Fenwick Willan.

Click here for further details.

For obvious reasons little publicity has been given to the logistics of recovering hijacked vessels, although Lloyd’s Guillaume Bonnisent, K&R underwriter with Lloyd’s insurance group Hiscox, recently highlighted that the costs involved are such that the ransom itself can account for just 25% to 30% of the costs of the incident. Now it has emerged that owners are declaring general average when vessels are seized.

arine claims management group and Maritime London member W K Webster says it has been involved on behalf of cargo insurers in a number of recent piracy cases where the ship owners have either declared General Average (GA) and indicated that they would seek recovery of a share of any ransom payments made through GA proceedings, or utilised similar mechanisms to seek contributions from cargo interests. Websters has prepared a general briefing paper for its clients.

Lloyd’s of London has published a strategic plan, outlining its direction and key priorities for the next three years. “Lloyd’s vision remains to be the platform of choice for insurance and reinsurance buyers and sellers to access and trade specialist property and casualty risks,” said Lloyd’s chief executive Richard Ward.

“We aim to deliver this vision by building on the five principal benefits of operating at Lloyd’s – the market’s performance management framework, the capital advantages of mutuality, our superior financial security and ratings, our global market access, and our cost-effective operating environment.”

“The plan summarises the current position for each benefit and highlights the major priorities for the next three years with a particular emphasis on 2009 activities,” he said. “While the first three benefits are largely delivered, the importance of maintaining and improving our performance framework as well as our financial strength and capital flexibility remain central to the strategy.”

Mr Ward said that good progress has been made during the last year to enhance market access and improve the efficiency of Lloyd’s operating environment, but he believes that there is still more to do.

“We must continue to improve the attractiveness of the Lloyd’s market and its ability to access profitable specialist insurance business from around the world via a range of distribution mechanisms,” he said. “Lloyd’s is well placed to capitalise on market opportunities if conditions change and the plan recognises the importance of reacting swiftly to changing events.”

He added: “Strength and flexibility must remain the hallmarks of our marketplace as we face the uncertain times ahead. We have shown that we can meet difficult challenges and I have no doubt that in partnership with the market we can continue to do so in the future.”

Moving waste is big business

There is plenty which can go wrong when moving waste around the world according the UK P&I Club. In its latest publication, The Perils of Waste Shipments in Freight Containers, the club highlights the problems and summarises the legislative framework surrounding the trade.

The movement of waste is big business. Many countries receive hazardous waste as a welcome source of business with at least 8.5 million tonnes shipped internationally each year. The transboundary movements of various wastes and their volumes have increased significantly over the last decade, with recycling the primary spur. Certain types of waste have become more valuable to export, such as electrical and electronic equipment, which is very expensive to recycle or treat in Western Europe.

Growing manufacturing and industrial activities in southern China and the country’s increased demand for recovered scrap materials have helped expand the trade. Between 2003 and 2007, the waste imported and exported by China - about two-thirds of it plastics- increased from about seven million tonnes to well over 11 million tonnes. Since 2006, the rate of increase has slackened considerably. Nevertheless, a vessel loading in the United Kingdom for China may hitherto have had up to 65 per cent of its loaded containers carrying recyclable waste.

The global economic downturn can be expected to adversely affect the level of international waste shipments. Whatever the volumes, however, political pressures and formal rules to ensure the trade is carried out safely and to high environmental standards will continue and consolidate. That adds up to quite a minefield for the container operator to traverse.

The UK Club notes that containers carrying waste shipments can suffer structural damage due to improper stowage practices at the loadout point or become unusable due to tainting from a particular cargo’s malodorous properties. Ports may turn down cargoes of contaminated green waste. Unbalanced loads may cause vehicles to roll over during road transportation. Shipments may be rejected at the port of discharge due to incorrect or incomplete documentation. Shippers and receivers may fail to take timely and appropriate measures to mitigate problems arising from incidents and may even abandon waste cargo, leaving the container operator to arrange disposal or return the cargo expensively to origin.

According to the club, classifying waste can be hard as 100 per cent pure waste streams are difficult to produce unless an advance separation process is used. Not all countries have access to the technology. Further, there has been confusion about waste that is not ‘waste’ but is exported as raw material for recycling. This raises questions about disposal routes, treatments and prospective re-use of material.

For full details see www.ukpandi.com

Lloyd's Register Group says its income rose by 19.6% to GBP594m with a marginal increase in surplus before tax “generally in line with the budgeted target”. LR says that the surplus for the year allowed for a significant increase in spending on projects and personnel in support of the group’s medium and long term business objectives.

Lloyd’s Register chairman David Moorhouse says: “Following very strong growth in 2007, I am pleased to be able to report another year of strong underlying financial performance in 2008. While the recent global financial chaos had little effect on our results for the year to June 2008, it is clear that next year will pose a significant challenge to the Group. I am confident that if we take appropriate action in the short term the Group will achieve a positive outcome next year. “Our charitable giving this year was GBP6.3m, with GBP6m going to the Lloyd’s Register Education Trust and £0.3 million being awarded to various community charities. LR's Marine business achieved revenues 14.7% up on the prior year."

LR notes: “The marine market, having enjoyed a six year period of exceptional growth, has moved to a period of high volatility and significant decline in the number of new ship orders. While Lloyd’s Register’s new construction order book looks very positive through 2010, it is conscious of the potential for high levels of existing ship order cancellation and of the need to adopt a proactive stance in this challenging market.”

It adds: “In the year, the Marine business again achieved great success in attracting quality tonnage to Lloyd’s Register class and continued to put a very strong emphasis on the quality of the vessels in its classed fleet. Despite the number of vessels disclassed exceeding the number of transfers into class, new constructions entering the fleet have increased the total fleet size to a record 144m gt as of June 2008.”

Against a backdrop of negative investment returns, P&I club and Maritime London member Steamship Mutual has announced a standard premium increase for 2009/10 of 17.5% for P&I and 15.0% for FD&D, backed up by an increase in deductibles.

The club released its annual Mid Year Review last week providing an assessment of the club’s position in the current testing market conditions. In the review, Steamship Mutual reports steady growth in owned entered tonnage, up by 3.4 million GT since 20 February, and improvements in pure underwriting results for both 2006/07 and 2007/08.

However, the club says that negative investment results in the current year and the prospect of continuing market volatility in 2009 have compelled the directors to eliminate any future reliance on investment income to subsidise underwriting results and to set a policy year combined ratio target of 100% for 2009 onwards. In future, any investment income will be allocated entirely to reserves.

James Stockdale, Steamship Mutual’s CEO, said: “While I am delighted by these results, the volatile investment markets have hindered real financial progress. In areas where we can exercise a degree of control, we have done well, but that success has, this year, been negated by extreme financial market conditions and a deteriorating global economy. Nevertheless, in the longer term, the Club’s strong underwriting position will stand it in good stead.”

“At present, the investment markets are testing the industry’s capital adequacy models to their limits. It is to be hoped that regulators will allow a reasonable degree of flexibility in the rebuilding of capital over time and will take account of the degree of trapped value in investment portfolios. Otherwise, if markets fall further, few P&I Clubs will be immune from the pressure to raise additional capital.”

The Institute of Marine Engineering, Science and Technology (IMarEST)has appointed a new chief executive. Marcus Jones, currently the association’s chief operation officer will take up the role from 1 May 2009, succeeding Keith Read CBE, who has served the Institute first as director general and then as chief executive since January 1999.

New UK maritime industries body One Voice, representing shipping, ports and maritime business services sectors including Maritime London, has broadly welcomed the Marine and Coastal Access Bill. The Bill is intended to open up the coastline to more leisure activities and to protect the surrounding marine environment. A coastal path along the entire British shoreline is planned, to encourage public interest in protection and biodiversity. A new Marine Management Organisation (MMO) is to become the country's lead agency marine conservation and policy.

One Voice chairman Richard Everitt said: “The UK maritime industry fully supports the Marine and Coastal Access Bill, but stresses the need for proper consideration of the interests of UK shipping and the wider commercial maritime sector. As the Bill moves forward we hope that the Government’s legislation will deliver the appropriate balance between environmental, commercial and social interests for the benefit of all.”

Specialist insurance manager Thomas Miller has announced two top appointments to come into effect in March 2009. Charles Fenton moves up from deputy chief executive to chief executive of the TT Club. He succeeds Paul Neagle who will become chief executive of Thomas Miller Investment.

Mr Fenton, who has been with Thomas Miller since 1997, is a former chief operating officer of Thomas Miller P&I which manages the UK P&I Club. He has led the recent restructuring of the TT management operation and will be responsible for implementing its future business strategy.

Alan Gavin

Alan Gavin, Lloyd’s Register’s marine director, will be retiring on 30 June next year, following a 34-year career in marine classification. He will be succeeded by CMA-CGM’s Tom Boardley.

Mr Gavin has helped lead classification through many of the significant challenges of recent years, including the bulk carrier safety initiatives, the introduction of Common Structural Rules and, LR says, “the evolution of IACS into the de facto technical arm of the International Maritime Organization (IMO)”. He was IACS chairman (2002 – 2003) and is the current Lloyd’s Register’s Council Member.

Mr Gavin will continue in an advisory role to LR.

Mr Boardley joins LR following a long career in the shipping industry. Currently CEO of CMA-CGM (UK), Tom is the senior representative of the CMA CGM shipping group in the UK, responsible for ship management, Shortsea Shipping Line management, and the liner agency of the four CMA CGM brands in the UK.

The Worldscale Association (New York) and Worldscale Association (London) have announded that Basil Mavroleon of C R Weber and John Bodkin of Braemar Seascope will be chairing the respective associations in 2009. The pair replace John DeSantis of McQuillings Brokerage and Mike Brown of Simpson, Spence and Young.

Worldscale is a schedule of nominal freight rates intended to be used as a standard of reference to compare rates for all tanker voyages and market levels.