Mr Embiricos believes that tax on carbon emissions from vessels "simply a tax on globalization and a tax on trade."

Greece's Minister of Merchant Marine George Voulgarakis visited London last week to meet members of the Greek shipping community at the invitation of the London-based Greek Shipping Co-operation Committee (GSCC).

In his welcoming speech GSCC chairman Epaminondas Embiricos outlined several areas of concern and especially forthcoming negotiations at IMO on CO2 emissions.

Mr Embiricos congratulated the minister on the "effective work" of the Greek delegation at the recent IMO meeting which "achieved great success" in speedily agreeing to an effective amendment to MARPOL Annex VI. He said this agreement on emission control "is not only of great importance in protecting the environment, but also demonstrates how effective IMO is in fulfilling its function as the sole legitimate regulator of the shipping industry."

He sounded a cautious note on forthcoming talks on CO2 emissions, saying: "Great care needs to be taken on this subject, lest harmful mistakes are made. Some are mistakenly advocating that a price should be put on carbon, so as, as they say, to ensure that those engaged in maritime transport pay the full social cost of the choices which they allegedly make. I am concerned at this misguided approach and would like to put the record straight."

He said that carbon emissions from ships are not due to the choices which shipowners make.

He continued: "The consumption of fuel by ships is not in any way discretionary, nor is it a result of choices made by shipowners, Nor, of course, do vessels consume fuel for recreational purposes. Vessels consume fuel and emit carbon dioxide simply and purely so as to transport the world's trade. If nations have decided that they benefit from globalization and from world trade and are supportive of globalization, carbon dioxide emissions from ships are a direct and inevitable result of such a decision. Nor is an alternative, non carbon based fuel, a practical possibility in the foreseeable future."

Mr Embiricos said tax on carbon emissions from vessels, in any form, "is in effect simply a tax on globalization and a tax on trade and would be insignificant in reducing carbon dioxide emissions from ocean going vessels."

He warned: "Capping or cutting vessel carbon emissions, would simply result in capping or cutting trade. This is an area too important and too sensitive to allow mistakes to be made, for mistakes risk harming not only the shipping industry, but world trade and the world economy."

"Before leaving this subject," he noted, "and as an indication of how careful and deliberate one needs to be, I should mention that recent studies have shown that vessel emissions indeed contribute to net global cooling, not warming, mainly as a result of sulphate aerosols and methane reduction. These matters need to be carefully studied and taken into account."

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The Baltic Exchange Dry Index hit an all time high on Friday reaching 11,459 points. The index tracks dry bulk freight rates across a range of vessel sizes. Capesize vessels have been commanding daily hire rates of more than USD 275,000 per day whilst USD 120,000 per day not unheard of for panamax vessels.

Behind the surge has been the continued demand for iron ore into China, strong coal demand growth in India, high steel prices, rising demand for grain, as well as port congestion at key export terminals in Brazil and Australia.

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Come and visit Maritime London at this year's Posidonia where we will once again be running a pavilion at stand 250. Participating companies are Clarksons, Baltic Exchange, BMT, Lloyd's Agency, Gibraltar Port Authority, Roxby Media, Rightship, UK Ship Register and Headland Media.  

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The Maritime and Coastguard Agency has launched a 12 week public consultation on proposal for new legislation to regulate ship-to-ship transfer operations in UK waters.

The draft Regulations prohibit cargo transfers and bunkering operations in UK territorial waters except where they are carried out in statutory harbour areas and require that the environmental impact of the transfers must be assessed. Part of the rationale for the new regulations appears to be a concern that STS only takes place in areas where spill response contingency plans are in place.

The new regulation would mean that all UK ports would have to assess the potential impact of existing bunkering operation within the areas of jurisdiction.

The draft rules allow for exemptions in cases of emergency such as transferring bunkers from a casualty to another vessel.

In its explanation of the proposed new legislation the MCA says:

“There is already a requirement under the Merchant Shipping (Oil Pollution Preparedness, Response and Co-operation Convention (OPRC)) Regulations 1998 for oil spill response plans to be in place in statutory harbour authority areas. This means that operators must have in place the necessary resources to respond to a pollution incident arising from their operations (although it should be noted that voluntary shipping industry guidelines for contingency are currently utilised and have a good safety record). As a general rule we consider that it is only appropriate for STS transfers to take place where these approved plans are in place.”

Shipping Minister, Jim Fitzpatrick, said: "These measures will ensure that ship-to-ship transfer operations in UK waters continue to be of the highest standards in terms of safety and protecting the environment, and further reduces the risk of an oil spill in UK waters. I encourage everyone with an interest in this area to submit their comments to the MCA." The consultation closes on 7 July.”

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P&I Club Steamship Mutual has announced record financial results, after a challenging year for many P&I insurers as the market continues to experience record levels of large claims. Despite the difficult P&I claims environment, the Club achieved an overall operating surplus of USD 27.6 million.

Steamship Mutual’s free reserves have increased by 17.5% to their highest ever level, at USD 185.8 million. Over the same period the Club’s entered tonnage has grown to a record 72 million GT.

James Stockdale, CEO, commented: “Steamship Mutual continues to achieve its strategic objective of creating long term financial stability for a growing membership through prudent and disciplined underwriting. These positive financial results show that Steamship Mutual is continuing to grow while successfully weathering the current adverse claims environment.

“Higher claims are an unavoidable side effect of the buoyant shipping market, which is likely to continue until a slowing world economy takes some of the pressure off and a solution is found to the chronic shortage of experienced crew. To succeed the Club must maintain its focus on sound underwriting, prudent financial management and effective loss prevention. If we stick to those principles, Steamship Mutual is well placed to flourish as a top tier P&I Club.”

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Continued high levels of claims and a “turbulent investment environment” have hit the UK P&I Club’s financial results for the policy year 2007. The club had net premiums of USD 312m, up from USD 358m in 2006 against total claims provisions and outgoings of USD 408m, up from USD 306m a year previously. The net premium figure takes account of payments of USD 74m to the International Group Pool.

Although the sum going to the IG was USD 4m less than in 2006 the club says this again had a “huge impact” on the Club’s results. The club's free reserves were reduced by USD 34m to USD 229m. The club says its investment returns were above initial expectations at 6.5% per cent for the year but down from the 9.7% achieved in 2006. Most investment returns came from the fixed income portfolio of 8.45%.

The sustained high level of large claims which shaped 2006 continued in 2007 with the impact on the Pool amongst the greatest in the past 15 years. The cost to the UK Club in the 2007 policy year could be as much as USD 77 million, based on its 14.5 per cent provisional share of the Pool. This compares with the Club’s current projection of about USD 84 million for the 2006 Pool.

At the 2008 renewal, the prospect of higher Pool claims was addressed by a separate Pool surcharge to support a general increase for ordinary claims for 2008. The targeted growth was 17.5 per cent renewing mutual entered tonnage with 16.5 per cent achieved before terms.

According to the club chairman Tullio Biggi: “Even though this increase was seemingly high, the wisdom of this course of action has been seen through the factors that continue to drive the level of Club and Pool claims higher.” He added that “unfortunately, a significant increase in the cost of P&I insurance has again been required. However, members had appreciated the need for the premium increase at the last renewal, not least those with newbuilding programmes who had committed their new ships to the Club. The actions the Board has already initiated to redress these adverse factors give me confidence that the Club remains on a sound financial footing for the future.”

He concluded: “I expect P&I insurance will continue to become more expensive as the environment in which ship owners operate is ever less forgiving of accidents of any kind. We can do our best to avoid those accidents and the Board will, of course, seek to minimise the cost of P&I cover wherever consistent with maintaining the Club’s strength and objectives.”

Mr Biggi has announced he will be retiring from the board of the UK P&I Club with effect from the annual general meeting in October 2008 following his decision to retire from V.Ships, the company he has represented on the board since first being elected a director of the Club in 1998.

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The Chamber of Shipping has welcomed plans announced last week for the maritime sector by prime minister Gordon Brown as part of the government's legislative programme for the next parliamentary session 2008/09.

The draft Queen's Speech proposals included several bills of significant relevance to the shipping industry: Marine and Coastal Access Bill, Transport Security Bill, Citizenship, Immigration and Borders Bill.

Edmund Brookes, the Chamber's deputy director-general said: “The Chamber welcomes the new legislative programme and the central role shipping will have in the next parliamentary session. In particular, the Transport Security Bill is long overdue. The Bill will provide the national implementation of measures agreed two years ago by International Maritime Organization. However, the intervening period has allowed for useful additions to be made to clauses, which now clearly empower the Royal Navy to be more effective when dealing with incidents of piracy.”

He added: “The Chamber is pleased to see the establishment of a Marine Management Organisation (MMO) in the Marine and Coastal Access Bill. We believe the MMO should have board members with expertise in shipping, ports/harbours, fishing and aggregate extraction. This commercial maritime experience will ensure that the concept of marine spatial planning is properly applied. Furthermore, it is essential that coastal access respects the need for port security to ensure personal and operational safety are maintained.”

Mr Brookes concluded: “The shipping industry’s long-term objective is active partnership with the Government and the Chamber will continue to work closely with its members to ensure the industry stays high on the political agenda.”

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The TT Club says that the UK’s Marine Accident Investigation Branch (MAIB) recent report into the MSC Napoli incident has backed up its contention that container weights are “habitually mis-declared”.

Commenting on the report, Peregrine Storrs-Fox, risk management director at the TT Club, pointed out that the MAIB specifically highlight the difference between the declared and actual weights for the 660 containers stowed on deck, and the fact that 7% of those containers were in the wrong position or declared as the wrong container – although this is within the industry norm of 10%. “The report draws attention to the fact that shippers of containers are sometimes unable to weigh containers before shipment because they lack the facilities. Furthermore they are discouraged from doing so by factors such as import taxes, loading restrictions, and rail and road weight restrictions”, says Mr Storrs-Fox.

”The fact that many shippers or consolidators do not have easy access to weighing facilities, should not mean they loose sight of the significant safety implications of an over-weight container even before it is loaded on board a ship.”

The detailed investigation also gave an insight into the accuracy of cargo declaration, particularly of dangerous goods. The most likely reason for incorrect placing of containers on deck is to accommodate declared dangerous goods.

“These findings simply underline the TT Club's continuing concern that cargo weight and hazardous details are habitually mis-declared”, Storrs-Fox states. “Although it was not seen as a primary cause of the accident, the MAIB report does state that mis-declaration erodes or eliminates existing safety margins; and it also points out that only in container shipping is the weight of the cargo unknown.”

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AXA Corporate Solutions, the specialised lines insurer within the giant AXA Group, says its marine business, which account for 19% of its overall book of business, grew particularly strongly last year.

Patrick de La Morinerie, deputy chief executive and responsible for Speciality Markets, said: “We are particularly pleased that marine business, where we lead more than 60% of our portfolio, grew by 16%, despite a 3% negative impact from exchange rate fluctuations, including the weakening dollar.”

AXA says that the growth was partly due to the continuous expansion of marine transportation, but also represented a “not insignificant increase” in market share.

The company is also successfully developing its megayacht book of business. Total turnover of AXA Corporate Solutions in 2007 was a little over Euro 1.8bn – up by about 7%. Its Q1 2008 results that AXA CS saw its turnover grow by 3.5% to Euro 889m., driven largely by its marine and property business.

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UK-based shipping service group Braemar Shipping Services plc made a pre-tax profit of £14.7m (USD 23m) in the year to 29 February. The company says that on an adjusted basis this represents an increase of 34%. The company adds that its strategy of broadening the business into shipping and energy services is developing well.

Company chairman Sir Graham Hearne said: “Shipbroking has thrived in shipping markets which have been both volatile and buoyant. The demand for oil and raw materials has continued unabated attracting further new investment in shipping.

“Market conditions remain favourable for our businesses and the financial year has begun well, so far with no adverse effect from the global credit squeeze. Freight rates and vessel values are both firm and there is strong demand for our services, all of which bodes well for the new year.”

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Lloyd's Market Association, the representative voice of the Lloyd's underwriting community, plans to participate in a European Commission consultation of the Block Exemption Regulation (BER). The BER covers, amongst other subjects, insurers cooperation in the production of standard policy wordings and clauses and lapses by default on 31 March 2010.

The Commission is required to submit a report to the European Parliament on the functioning of the BER by March 2009 and the purpose of this consultation is to gather information from stakeholders prior to preparation of that report. LMA says it will work with Lloyd’s and the European insurance industry body CEA to determine what response it should make to this consultation.

In a statement LMA says it welcomes discussion with any of its members with views on this subject. Meanwhile the European Liner Affairs Association (ELAA) has submitted recommendations to be included Block Exemption consultation as it applies to liner shipping consortia. ELAA, the representative body for container shipping lines in Europe, says it supports both the review of the EC Regulation on consortia and the Commission’s recent public statements that this will result in the adoption of a new block exemption. ELAA says that it believes that the review is critical as a renewed Block Exemption Regulation (BER) for consortia, along with up-coming Commission Guidelines for the application of competition rules, will give the liner industry a solid framework for operation as it adapts to a regulatory environment post the demise of liner conferences in Europe.

The current BER 823/2000 was most recently amended in 2005 but, the ELAA notes, the last in-depth review by the Commission was in 1999 and the ELAA contends that changes in the operational nature of the liner shipping industry and consortia in particular should now be taken into account.

Reacting to recent EC indications that the BER will be maintained, Chris Bourne, Executive Director of ELAA commented: “I am pleased that consortia are here to stay as they make sense for all parties. All the lines use consortia and in many cases they are the only way in which smaller lines can remain competitive. Our customers are in support of consortia as they help to maintain high levels of port choice and service during periods of variable market demand. Environmental contingencies are also well catered for as a result of the efficiencies created by consortia operation."

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Maritime London is supporting a UKTI organised Global Ports Seminar which takes place in London 3 June. The event will provide an opportunity to hear about port expansion plans from a range of port developers and government representatives including Shanghai International Port Group, Vancouver Fraser Port Authority, Saudi Port Authorities and the Mexican government.

www.globalportsseminar.co.uk

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Shipping might be immune from recession, a shipping lawyer told attendees at Maritime London's recent seminar looking at the effect of the global credit crunch on the shipping industry.

Richard Baines, a partner with Maritime London member firm Holman Fenwick & Willan, said a recession would not inevitably spread to the maritime sector, mainly because the economies of China and India will continue to grow at a fast pace. "Some banks, German ones in particular, have left the market. Those that remain committed [to ship finance], look for blue-chip companies where they can find them," he pointed out.

Private equity funds will probably enter to fill the vacuum left by banks that exit ship finance, a trend that is again most apparent in Germany, Baines added. "Some funds are cash rich, and so are some shipping companies," he noted.

Click here to download his presentation.

Maritime London holds regular seminars and meetings which are free to members.

For further details about joining Maritime London contact Doug Barrow.

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