IN THIS ISSUE
1. Blockchain Technology
2. Short Cuts
3. Mortality Rates and Ocean Carriage of Livestock
4. House of Commons Transport Select Committee
5. Somali Piracy Dilemma over General Average Treatment of Shipowners’ Expenses
6. People and Places
The Maritime Advocate–A Growing Concern
This publication, nicknamed “the Avo” passed a milestone last summer. It has passed the 20 000 subscriber mark, the highest total since its foundation in 2001. As a result of hand-ons and internal republications within firms, it is fair to assume a total readership of around 60 000 located in 120 countries. This gives the Avo a very wide footprint in the maritime world. If you have a message or product to promote or circulate, the Avo can promise to get the word out at affordable rates. Give us a try why don’t you.
1. Blockchain Technology
In the latest edition of Mainbrace, the Blank Rome e-zine, there is a speculative piece by Keith B. Letourneau on the prospects for this technology within maritime commerce. Best known for the supportive role Blocktrain plays in the exchange of bitcoins, the claim here is that it may sweep all before it in the maritime commercial world. It would be good if one of the existing platforms like Bolero, essDocs or eTitle could compare and distinguish their offerings.
http://www.blankrome.com/siteFiles/Publications/Mainbrace_Mar_2017.pdf#page=6
2. Short Cuts
Pungent, triste writing by J. Jason Mitchell in the London Review of Books on the boat people from Libya:-
Weâd been at sea for eight days, patrolling the Libyan coast from Zuwara to Sabratah alongside half a dozen other NGO vessels. Never coming closer to shore than 12 nautical miles â the invisible boundary demarking international waters â we could still distinguish structures through binoculars: tall buildings, power lines and an oil refinery marked out by its smoke during the day and its flare by night. When the winds finally dropped, the rafts came: an exodus of more than 11,000 refugees and migrants over a three-day period.
https://www.lrb.co.uk/v39/n06/j-jason-mitchell/short-cuts
3. Mortality Rates and Ocean Carriage of Livestock
Livestock vet Lynn Simpson, writing in Splash 24/7, focuses her attention on how casualties are presented in Australian Government statistics.
http://splash247.com/live-animal-exports-alternate-facts/
4. House of Commons Transport Select Committee
Maritime Growth Study inquiry: extended deadline for written submissions
On 21 December, the Transport Committee announced an inquiry into the Maritime Growth Study (MGS), a report on the UK’s maritime sector, published by the Department for Transport in September 2015.
The inquiry will examine progress towards implementation of the Studyâs recommendations since publication and consider the Government and industryâs overall plan for the maritime and marine sector, including in the context of Brexit negotiations. It received a number of helpful written submissions from a range of key stakeholder groups by the original deadline on 24 February.
As key stakeholders will be aware, the Department for Transport is itself reviewing progress on the MGS. In the light of the ongoing work within the Department, the Committee has decided to extend the deadline for written submissions to its inquiry until Friday 2 June, before starting a series of evidence sessions.
The Committee is particularly keen to receive submissions from individuals and companies engaged in the range of maritime and marine businessesâshipping, ports and manufacturing, and associated services, including education and training, consultancy, law, and financial services. Organisations that have already submitted written evidence to the inquiry are welcome to send supplementary submissions by the new deadline of 2 June.
The Committee invites written submissions addressing one or more of the following points:
** The work of the UK maritime industry, and the UK Government, in providing leadership and a coherent vision for the maritime sector as a whole;
** The success to date of actions to increase the commercial focus and culture of the Maritime and Coastguard Agency;
** The success to date of actions to grow the UK Ship Register (the âUK Flagâ);
** Steps taken by the industry and the UK Government to identify and address maritime skills shortages, including the Maritime Skills Investment Fund; maritime apprenticeships; training schemes; and promotion of maritime careers;
** Industry progress towards the development of a single marketing strategy for the UK maritime sector;
** The UK Governmentâs progress towards the promotion of the maritime sector to inward investors, including through UK Trade and Investment and foreign embassies;
** Industry and UK Government progress towards increasing the competitiveness of UK ports, including through investment in surface access;
** Industry and UK Government support for the UK cruise industry; and
** The adequacy of the overall plan for the UK maritime sector, including in the context of the potential implications of the UK exiting the European Union, and how the strategy may need to evolve.
The extended deadline for written submissions is Friday 2 June 2017
http://tinyurl.com/HCTransport
5. Somali Piracy Dilemma over General Average Treatment of Shipowners’ Expenses
James Brewer writes:-
Marine average adjusters are at the centre of a conflict over whether shipowners should be compensated for having to stump up thousands of dollars in extra costs when extricating their vessels from the hands of Somali pirates.
Although the sum at stake in the incident that has led to the controversy is modest in commercial terms, argument over the principle at issue is about to go all the way to the Supreme Court, the final court of appeal in the UK for civil cases.
Opinion is sharply divided within the average adjusting profession over whether a shipowner should alone have to bear expenses that build up during attempts to get Somali pirates to slash their ransom demand, even when the eventual deal saves substantial sums for both ship and cargo interests.
A clear outline of the arguments was presented to the London market at the Association of Average Adjusters spring 2017 City seminar, an event organised in conjunction with the International Underwriting Association.
In what he stressed was a personal opinion Robert Tomlinson, adjusting manager at Richards Hogg Lindley and a senior associate of the adjusters’ association, welcomed a Court of Appeal finding, which is to be challenged in the Supreme Court in a hearing likely to begin in September.
He took as his starting point a vessel hijacking eight years ago, when piracy in the Indian Ocean was close to its peak. The scourge was largely suppressed by international naval action, improved voyage reporting and the hiring of armed guards for ships, although on March 13 2017 a new serious incident off Somalia was reported. The new incident was resolved quickly but gave rise to fears that instability in the region might prompt further assaults against ships.
Summarising the basic dilemma of whether certain expenses should be offset in General Average, Mr Tomlinson entitled his talk The Longchamp and substituted expenses in General Average: what the Rule F is going on?
The title referred to the Longchamp, a chemical tanker seized by Somali pirates on January 29 2009; and to Rule F of the York Antwerp Rules 1974 (a framework incorporated into many contracts of affreightment). A ransom of $6m was demanded, and after 51 days of wrangling, this was whittled down to $1.85m.
In the time taken to achieve the reduction, the owning company had to spend an extra $180,000 on crew wages, maintenance and fuel. Should an owner be able to claim for such ‘substituted expenses’ in the General Average apportioning of costs? (A General Average act arises from an extraordinary sacrifice or expenditure made to safeguard the common property during a ‘maritime adventure’).
Rule F states: “Any extra expense incurred in place of another expense which would have been allowable in general average shall be deemed to be general average and so allowed⊠but only up to the amount of general average saved.”
Payment of a ransom is usually allowable within a general average settlement. Wages incurred and fuel consumed while a vessel is detained by pirates are not allowable, because these losses are caused by delay and therefore excluded under Rule C of the York Antwerp Rules.
In the Longchamp case, the average adjusters allowed the $180,000 expenses to general average under Rule F because these were incurred during the negotiation period, and the negotiation saved considerable ransom money. Cargo insurers objected to that decision, there was a submission to the advisory committee of the Association of Average Adjusters, and the committee by a majority came out against the terms of the proposed adjustment. The High Court conversely backed the original adjusting decision.
The Court of Appeal overturned the High Court ruling and held that there was no alternative course available to owners but to negotiate with the pirates, so Rule F – allowing a ‘substituted expense’ – could not be engaged. The Court of Appeal said that regardless of whether the ransom is paid on demand there will be negotiation, and expenses will be incurred, the difference being only in their extent; however, the court went on to hold that it would not have been unreasonable to have paid the initial $6m ransom demand.
Mr Tomlinson contended that the Court of Appeal decision was welcomed by most adjusters and achieved what most would deem the correct application of Rule F. He stressed that with the Longchamp circumstances, referred to as Mitsui & Co and Others vs Beteiligungsgesellschaft LPG Tankerflotte, going before the Supreme Court, “it is by no means a settled issue. The whole case centres on what happens with Rule F.” As such, he offered several comments on the Court of Appeal decision.
He said that given the pattern we have seen in virtually every case of Somali piracy, negotiating before paying a ransom is the tried and tested method of securing the release of a vessel. It is hard to see how it could be considered reasonable to pay the initial ransom demand without attempting to negotiate.
“Somali piracy follows well known protocols: we know how it works. After an average of about 50 days they reach an agreement and the ransom is paid. To what extent an initial demand would be negotiated down could be predicted with a high degree of accuracy,” said Mr Tomlinson.
He also questioned: “Does the option ‘not’ to negotiate even exist?” In a separate case, Masefield vs Amlin, expert evidence had been given that after a Somali pirate seizure the “safest, most timely and effective means to secure the release of a ship’s crew in such circumstances has proven to be, in case after case, to negotiate and subsequently pay a ransom.”
In other parts of the world, it might be inappropriate to attempt to haggle, but in the context of Somali piracy, “they are expecting to negotiate. This is how every single case has gone. You introduce stability into the situation instead of introducing an unpredictable element.”
As the majority in the advisory committee had stated, the unprecedented acceptance of a ransom on demand might well have led to the pirates asking for more money. Mr Tomlinson emphasised: “I think you have to negotiate. It is just life. I think it would be unsafe not to.”
He concluded by referring to further problems the marine market might face, should the Supreme Court overturn the Court of Appeal position. If Rule F is to take precedence over Rule C in piracy matters, then could we see allowances under Rule F for deliberate pollution to save salvage expenses, what allowance would there be for loss of perishable cargo, and would there have to be a new look at loss of hire provisions?
Keith Martin, chairman of the Association of Average Adjusters, who presided at the AAA/IUA event, expressed thanks to Mr Tomlinson for his “stimulating” analysis of the legal approach to substituted expenses.
6. People and Places
Brian Davies of the Shipowners Claims Bureau is running the London Marathon which takes place on Sunday, 23rd April. He writes:-
For many years I have thought about taking part but have never quite had the courage to commit. This year we celebrate the American Clubâs centenary â as an employee of the Clubâs Manager this is an occasion worthy of marking by my doing something different. The shipping industry is currently going through a period of unprecedented recession, due in part by the economic uncertainty that grips the worldâs economies and also due to an over capacity of ships. The people who suffer most during a time of recession in the industry are those people on whom we all rely mostâ the humble seafarer. Founded over 200 years ago there is one charity that reaches out to this often forgotten group of professionals providing support and care in ports around the world â the Sailorâs Society. To celebrate the American Clubâs centennial year and to mark the occasion by doing something worthwhile I am running the marathon to raise funds for this most worthy cause; one that I had cause to call upon during my years of service in the Merchant Navy prior to becoming a manager of the American Club.
To learn more about the Sailorâs Society and to follow my experience and, if so inclined, to make a donation please visit my Just Giving page:-
http://www.justgiving.com/Brian-Davies9
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Poole Harbour Commissioners (PHC) have appointed a new management team at their marinas.
Kerrie Gray has taken over as Manager of the Poole Quay Boat Haven and Port of Poole Marina. She first started working for PHC in the summer of 2005 as a seasonal staff member and returned to work at the marinas for a number of seasons between spending the winters in the Caribbean, volunteering as Watch Leader and Deckhand on the Tall Ships Youth Trustâs two 200ft brigs. Kerrie became a permanent member of staff in 2010 and has since moved up the ranks.
Kirsty Caño has been promoted from Marina Assistant to the role of Assistant Manager. Kirstyâs maritime career also began as a volunteer Watch Leader and Deckhand for the Tall Ships Youth Trust and she has completed around 75,000 nautical miles on various tall ships around the world. She then crewed on the Brownsea Island passenger ferries in Poole Harbour for four years before joining PHC in 2012.
———-
essDOCS has acquired eCertify Pty Ltd, the inventor of the electronic Certificate of Origin (eCO). eCertify provided the first eCO solution in 2008. Today, its eCOs are used by 13,000+ companies and 120+ Chambers of Commerce in 6 countries.
eCertify provides Chambers of Commerce, Authorizing Bodies, exporters and freight forwarders an online solution for application and issuance of eCOs, enabling them to eliminate time-consuming and inefficient, manual paper-based processes. eCertify is the leading eCO solution globally, with Chambers across Australia, Canada, New Zealand, Norway, the United States and South Africa.
âWith the additional resources now available to eCertify, we are planning to grow our eCO footprint extensivelyâ said Carman Rossi, eCertify Founder and Chairman of the Board. He continued, âwe will add Dutch eCOs later this year, and are planning an aggressive expansion to take us to 25 countries over the next couple of years organically and via partnerships.â
From the Avo Archive
The website of this newsletter contains all the editorial material since the inception of the Maritime Advocate as a print based quarterly in 1997 under the founding aegis of John Guy, Chris Hewer and Manfred Arnold. Readers can go to the site and search the database on the home page in its entirety. If you are looking for an old case, an old controversy or you would just like to see how many times you and your firm have featured in our annals feel free to access the archive. It is like this e-zine, free to Readers and we always appreciate the support of advertisers and sponsors.
We searched for references to the pioneering Bolero project and turned up this interesting book review which appears in Issue 485 of July 1st, 2011:-
Commercial Practice in Bunkering by Nigel Draffin (2011) Petrospot Limited ÂŁ60/Euro 65/$100 + p&p
The publishing house of Petrospot more and more seems to set out to deliver the sort of sound professional advice using the judgment of good experts with good writing skills, a plethora of specimen clauses and documents and the latest word on what is going on in potentially nebulous areas like sulfur emissions or co-broking arrangements.
We rather liked this book by Nigel Draffin, a dean of the bunkering industry who has written and taught on the subject of bunkers many times and who clearly has the knack of presenting a complex and many faceted subject in a blunt-plain-speaker sort of style. When he turns his eye onto a subject, he makes a lot of sense. The book is interesting throughout and certainly helps to guide neophytes like your editor. Our eye was caught by these items:
** The Bunkering Association’s Standard Terms and Regulations for Delivery and Supply (B.A.S.T.A.R.D.S.)–very droll
**The United States does not yet use IBAN but will probably participate when its own banking system is ready. Buyers, especially in the EU, will ask for the seller’s IBAN to set up payment. The chapter on banks and payment is very good. People who remember the strange waning of the Bolero project for electronic bills of lading might like to see how SWIFT handles its day to day banking business. Your average SWIFT message can teach you a lot about end user unfriendliness.
**On vessel arrest : And now the bad news. Under English law, the ability to arrest a vessel for non-payment of bunkers by anyone other than the owner of the vessel does not work. And the same is true of China.
**On the internet for bunker people: The sites are operated by journalists (for example, Bunkerspot, Bunkerworld, Platts, Reuters), by bunker brokers (for example, LQM Petroleum Services, Nautical Supply, Socomet Bunkering) by bunker traders (for example, O.W. Bunker & Trading, Amoil) and by companies that act as both broker and traders (for example, KPI Bridge OIl, OceanConnect). A good afterwiff of the original maritime internet bubble of 1999/2000.
We have no hesitation in recommending this book. The Petrospot books more and more resemble those ring bound chap books which all experts seem to have which consist of valuable documents and clauses for use in any given contingency. Perhaps the publishers should work to convey this quality using more than changes of font or use of borders. Perhaps there is a book in the notion of a cases, materials and clauses which could convey the essence of the subject and its mixture of old time traders knowledge and modern data handling.
http://www.petrospot.com/books
Incomplete Computer Glossary
BIT:
A word used to describe computers, as in ‘Our son’s computer cost quite a bit.’
BOOT:
What your friends give you because you spend too much time bragging about your computer skills.
BUG:
What your eyes do after you stare at the tiny green computer screen for more than 15 minutes.
Also: What computer magazine companies do to you after getting your name on the mailing list.
CHIPS:
The fattening, non-nutritional food computer users eat to avoid having to leave their computers for meals.
COPY:
What you have to do during school tests because you spend too much time at the computer and not enough time studying.
CURSOR:
What you turn into when you can’t get your computer to perform as in “You $#$%c% computer!”
DISK:
What goes out in your back after bending over a computer keyboard for seven hours at a clip.
DUMP:
The place all your former hobbies wind up soon after you install you computer.
ERROR:
What you made the first time you went into a computer showroom ‘just to look.’
EXPANSION UNIT:
The new room you have to build on to your home to house your computer and all its peripherals.
FILE:
What your secretary can do to her nails six and a half hours a day, now that the computer does her day’s work in 30 minutes.
FLOPPY:
The condition of a constant computer user’s stomach due to lack of exercise and a steady diet of junk food. (See Chips).
HARDWARE:
Tools, such as lawn mowers, rakes and other heavy equipment you haven’t laid a finger on since getting your computer.
IBM:
The kind of missile your family would like to drop on you so that you’ll pay attention to them again.
MENU:
What you’ll never see again after buying your computer, since you’ll be to poor to eat in a restaurant.
MONITOR:
Often thought to be a word associated with computers, this word actually refers to those obnoxious kids who always want to see you hall pass at school.
PROGRAMS:
Those things you used to look at on your television screen before you hooked you computer up to it.
RAM:
What you do the side of you computer when it’s not working properly.
RETURN:
What lot of people do to their computers after only a week and a half.
TERMINAL:
A place where you can find buses, trains, and really good deals on hot computers.
WINDOW:
What you heave the computer out of when you accidentally erase a program that took you three days to set up.
[Paul Dixon]