Japan in crisis

Lloyd's, the London based insurance market, said late last week that, following the Japanese earthquake and tsunami it was confident that could “respond to any claims in the normal course of business”.

In a statement the insurance market said:

“Our thoughts are with those affected by the major earthquake and tsunami events in Japan. Lloyd’s is committed to providing cover to the Japanese market and our first priority is handling claims swiftly and supporting the local insurers. It is far too early for us to comment on any potential business impact.”

Lloyd's added that it routinely “stress tests” individual syndicates and the market as a whole for large-scale natural catastrophes.

It said: “We specifically monitor and manage the market's exposure to a major Japanese earthquake and this event, whilst tragic in human terms, from a claims perspective is within our modelled parameters.”

Meanwhile seafarers' union Nautilus has urgently requested official guidance from the Maritime & Coastguard Agency regarding the Japan nuclear crisis and the safety of members on vessels trading to the area, including Tokyo Bay.

In a statement Nautilus says: “The situation is naturally causing concern and the Union has been contacted by members for advice. Nautilus understands that the MCA has advised that it is safe for UK ships to proceed to Tokyo Bay, but the advice for other Japanese ports seems to be uncertain. Seafarers were being advised to contact their companies for further guidance, and advice is also being sought from the Foreign & Commonwealth Office. The MCA has responded saying that seafarers should be guided by NAVTEX warnings for areas XI and XIII. In addition, the UK may send communications to all British ships via the Ship Register list.

However, the Liberian registry has advised vessels under its flag to remain 300 miles off the coast north of Onahama while, according to Nautilus, some companies are advising that vessels stay between 100nm and 200nm from the Fukushima nuclear reactors.

The union's general secretary Mark Dickinson said: “It is essential that the UK is proactive on the nuclear crisis in Japan and ensures that seafarers have access to appropriate official guidance. Seafarers should not have to be reliant upon somewhat conflicting information that appears to be emanating from different companies at present.”

Last week Braemar Shipping Services issued an analysis of the possible effects of the Japanese earthquake on the tanker market. It concluded that the scale of the effect will depend on how oil demand in the country reacts – how quickly will it rebound, and to what extent, in addition to the length of time the refineries remain shut.

There are immediate and longer term effects for both the crude and product tanker markets, the immediate effects manifesting right down to vessels due to discharge in Japan in the next few weeks and already on the water. In the longer term, decreased naphtha demand is likely to negatively impact on the LR1 and LR2 trades. Imports of diesel, gasoline, jet/kerosene and fuel oil on the other hand, are likely to increase, potentially to the benefit of the MR trades.

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Fears of student debt are leading to more considering a career at sea

More UK youngsters have been enquiring about going to sea since the start of the economic downturn according to InterManager president Alastair Evitt.

In a speech due to be delivered today at the Connecticut Maritime Association (CMA) conference in Stamford, Connecticut, Mr Evitt, who is also managing director of UK ship manager Meridian Marine Management, says there has been a rise in the number of enquiries for cadet positions since the recession began and also following recent announcements that UK university tuition fees are set to rise.

According to Mr Evitt: "Certainly our own experience has shown a marked rise in cadetship enquiries as the recession in the UK has had the combined effect of decimating graduate employment opportunities and increasing the cost of university courses up to 300%."

Maritime London’s own seafarer scholarship scheme is currently over-subscribed and will not be accepting any further applications until September 2011 for the January 2012 intake.

Calling for the industry to re-introduce management training, Mr Evitt says: "The whole maritime cluster is dependent on high quality candidates passing through the system. The attraction of quality entrants and training them accordingly is a long term investment. Officer training must be seen as university-equivalent vocational training."

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International Transport Intermediaries Club (ITIC) has warned owners that failure to pay ship agents promptly in accordance with contractual agreements can have serious consequences. In some cases costs involved can far exceed any unpaid invoices.

In the latest issue of its Claims Review, ITIC cites the case of a South American ship agent which was owed $25,000 by the owners of a cruise ship in respect of crew costs and supplies. The costs had been incurred over the course of a number of port calls and, when reminders and chasers to the owners failed to elicit payment, it was decided that more aggressive action was needed.

ITIC ascertained that the ship was chartered to a cruise line, was due to sail from a port in the Canadian Arctic for the High Arctic, and had no apparent plans to revisit South American waters. ITIC instructed Canadian lawyers to arrest the ship where it was, in the Canadian Arctic, and within hours of the arrest being served the owners had paid all outstanding debts in full.

ITIC notes, “The owners admitted that they did not think that anyone would be able to arrest the ship in such a desolate place. The owners were wrong, and paid not only the outstanding disbursements, but also the arrest costs”.

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Shipowners and managers are coming under increasing pressure as they struggle to be ready for the implementation the International Convention for the Control and Management of Ships’ Ballast Water and Sediments, adopted by the IMO in 2004.

The UK P&I Club's latest Legal Briefing focuses on the issue and warns that the convention is likely to come in to force in just two years time. The Convention will come into force one year after 30 states, representing 35 per cent of the world’s tonnage, sign up without reservation or have ratified it. So far 27 countries representing just over 25 per cent of the world’s tonnage have done so.

The club says: “It is impossible to know for certain how much longer it will take to reach the target of 30 states/35 per cent of the tonnage because to become a signatory, each government must find time in its own legislative process to address this subject. However, with outstanding states such as Panama having already enacted national legislation and the EU likely to urge its members to act, developments could be rapid.”

Jacqueline Tan, UK Club senior claims executive and author of the Legal Briefing, warned: “The ratification of the Convention and unilateral adoption of ballast water regulations in other countries means the time available for adopting the operational and documentary procedures is diminishing quickly. It could place shipowners and crews under considerable pressure to achieve compliance let alone get to grips with the operational complexities of ballast water regulations.”

The Convention recognises that ships differ in type, size and configuration and so initially allows for two standards of ballast water management: the Ballast Water Exchange Standard (BWE) – which is only acceptable until January 2014 or 2016 depending on the ballast capacity of the ship - and the Ballast Water Performance Standard (BWP) where ballast water must be treated prior to discharge.

Details of both standards and the relevant methods for conducting ballast water exchange are outlined in the Legal Briefing. There are many things a shipowner needs to do before the Convention comes into force and some are now becoming really urgent says the UK P&I Club. For example, a shipowner needs to conduct a study of all ballast water treatment systems available. Modifying or installing a ballast water treatment system is very costly and the club warns that many uncertainties are making the choice of a suitable system extremely difficult.

Furthermore there are not enough installation facilities to cope with the necessary work and a first-come, first-served system would not favour indecisive owners.

There is now, the club believes, a sufficient choice of equipment for ships with ballast capacities below 5,000 cu m but this is still not the case for ships with ballast capacities above 5,000 cu m. To make matters worse, new systems submitted for approval are not being approved sufficiently quickly, thus limiting choice.

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Marine consultancy and survey company, BMT Marine & Offshore Surveys, has launched a free guide to the technical aspects of marine hull and machinery insurance - a market handling many millions of dollars’ worth of claims each year. The company, a member of BMT Group, says that the guide is unique and that early indications are that it will become a standard reference publication, in the light of the welcome it has received from leading figures in the London underwriting market and beyond.

Simon Stonehouse of Brit Insurance and a prominent hull underwriter at Lloyd’s, says: “This is an essential reference guide for the marine insurance industry and a most welcome initiative. It has been many years since something of this calibre has been published and, as it’s available electronically, underwriters and claims teams can refer to it whenever and wherever – a great step forward.”

“Marine survey reports frequently contain engineering terminology which can be unfamiliar to the non-engineers in the wider spectrum of the shipping industry,” said the lead author, Dinos Levantis, who was recently in London to personally introduce the guide to underwriters.

“In an attempt to bridge this gap we have produced this guide, which covers some of the common terminology often encountered in survey reports for ships, their engines and their operations.”

Piraeus-based Mr Levantis is business director for the Mediterranean and Eastern Europe region of the company. He says that rather than seek to compile what would be an unwieldy dictionary of the entire terminology, he and his colleagues in Piraeus and other company offices have produced a small, easy-to-use handbook with clear illustrations of ship components which figure often in insurance claims.

The book is divided into three parts: general, hull, machinery. A blank page has been left next to each easily understood illustration for users to write additional notes and queries they may have which the company’s technical staff can advise on. The team has drawn on material from 24 authoritative sources to produce more than 70 pages of diagrams and explanations of terms relating to the key functions of ships – including those such as rocker arm, pushrod, scavenger air inlet, sterntube aft bearing, crosshead bearings – which might puzzle many novices or outsiders.

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The London headquartered Institute of Chartered Shipbrokers celebrates its centenary and is marking the occasion with a gala dinner at the National Maritime Museum in Greenwich on 26 May 2011 and the publication of a book, Quality Ashore, which chronicles the story of ICS from 1911 to today. The 128 page book is available in hardback (ISBN 978-0-901772-01-5) and softback (ISBN 978-0-901772-02-2).

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As part of a restructuring programme by Southampton Solent University, Warsash Maritime Academy (WMA)and the Faculty of Technology are being brought together to form a new Maritime and Technology Faculty.

However a statement stresses that WMA will continue to operate as normal and will be retaining its individual autonomy and branding. WMA head John Millican has been appointed Dean of the new faculty and will retain strategic responsibility for Warsash Maritime Academy. Andrew Hair becomes director of Warsash Maritime Academy assuming day to day responsibility for running the Academy, reporting to John Millican.

After 19 years’ sea service as a deck officer with P&O, Mr Hair came ashore into a personnel management role in 1997 and subsequently joined the Academy nine years ago.

Meanwhile WMA says that its new manned model ship handling centre at Timsbury in Hampshire is scheduled to run its first course in May. The university has also authorised the purchase of a new engine room simulator for installation at Warsash later this year.

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Simon Cockburn

The UK’s Permanent Representative to the International Maritime Organisation is squaring up for a sponsored diet to aid the Mission to Seafarers and to publicise the issue of piracy. Simon Cockburn, who has led the UK delegation to the IMO for 12 years, plans to shed a whopping 53kgs over twelve months.

Taking the floor of the plenary session, Simon told delegates that he was to be joined in the diet by the Mission to Seafarers’ secretary general, the Revd Tom Heffer.

“It’s a great cause and let’s hope the charity pounds will rise as the kilos drop off. The Mission works all over the world providing help for seafarers, including many victims of piracy. It’s right that in this year of orchestrating the response to piracy we support an organization that will help seafarers get over this terrible crime.”

Anyone wanting to sponsor Simon or to join him in his diet to aid the Mission to Seafarers, please contact events@missiontoseafarers.org

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