Sea Views: Yemen ship industry counts cost of Limburg

According to a fact sheet issued by the U.S. Department of State's Office of Counter-terrorism, the Oct-ober 6 terrorist attack off the coast of Yemen, on the French tanker Limburg has dealt a very serious blow to Yemen's shipping economy, from which it will be difficult to recover.

The report says that port activity in Yemen has suffered a 50 per cent decrease due to the consequential sharp increase in war risk insurance following the attack. Furthermore, the Yemen government is now paying for stepped up security through use of patrol boats and helicopters.

ICS claims security response threatens trade: Fairplay has reported an interview with Brian Parkinson, trade and operations advisor to the International Chamber of Shipping (ICS) in which he said that world trade is "under threat" from measures intended to combat terrorism.

He went on to be critical of the draft International Ship and Port Facility Security Code and of draft additions to Solas that are due to be considered at a diplomatic conference at the IMO next month and he added, "The only safe ship is a ship that never moves!"

The gist of his message was that a balance must be struck between security measures and the need to keep trade moving. He agreed that security concerns are real but said that the response should be practical and pragmatic.

His comments followed a general statement from the ICS that said, "We must avoid solutions that create 30 minutes extra work in a terrorist's two years of planning but add 30 minutes extra work for every one of the other million or so international consignments moving across borders every day."

K Line reports 35pc drop in interim profit: The Japanese carrier group, K Line, has reported its interim net income for the fiscal year ending March 31, 2003, has fallen 35 per cent to 4.9 billion yen ($40.6 million), owing to reduced demand for its shipping services during the period. The figure, for the same period in 2001, was 7.5 billion yen.

Despite the reported fall in profits the figure was better than the company had previously forecast on October 22 when an interim profit of 4.5 billion yen was predicted.

Furthermore, the 11th largest container company in the world (by capacity) said that its sales figures had performed better than its profits, since they had risen 4 per cent, to 309.6 billion, compared to 298 billion yen in 2001.

However, during the interim period the company's operating profit fell from 16.9 billion yen, during the same period last year, to 11.3 billion this year - a reduction of 33 per cent.

In a statement the company added that during the first half it pressed 13 new 5,500 TEU container ships into service and it also increased the number of direct port calls to China where, it said, "A remarkable expansion in cargo movement has been ongoing." It added that it ex-pected to significantly increase the amount of tonnage transported, compared with last year in the second half.

The company also said that freight rates for its Europe and North America services were beginning to recover as a result of its "desperate efforts" for restoration, adding it forecasted a profit for the full year of 10 billion yen.

Intertanko launches environmental initiative: On November 6, Doctor Paolo d'Amico, the chairman of the Environmental Committee of the tanker owners' body, Intertanko, announ-ced the launch of the organisation's 'Environmental Chall-enge'.

He was speaking to delegates at the ITOPF/OCIMF/ Inter-tanko seminar, being held in Hong Kong, and he explained that this project was aimed at enhancing shipping's role in environmental protection. This was necessary because of the apparent slow progress in developing solutions for major marine environmental problems and the Challenge was one way that could help the tanker industry deal with these issues.

Doctor d'Amico went on to say the Intertanko Environ-mental Committee has identified a number of major concerns that continue to face the industry. These are also high on the agenda of national governments, environmental organisations, the public at large and the International Maritime Organ-isation (IMO).

The aim of Intertanko's initiative is to promote and then reward through extensive worldwide publicity, cost-effective, practical solutions to the identified issues and concerns that represent significant breakthroughs.

Regarding the issue of ballast water, Intertanko is seeking the development of a reliable, cost effective, safe and environmentally sound method to prevent the transfer of harmful aquatic organisms around the globe.

The second issue detailed by the chairman was the need for a simple and reliable method to identify the source of illegal oil discharges from all types of ship, to prevent accidental spills of oil and hazardous materials, and to reduce outflow after accidents.

The Challenge is also concerned with dealing with air emissions from ships, and Intertanko is seeking operational solutions that will provide the shipping industry with the vital tools to meet the growing demand for lower emissions, despite a continuing demand for trade.

Doctor d'Amico concluded saying that solutions are being invited from individuals, companies and academic institutions, and might include technological developments, improved procedures or new facilities - the ultimate goal being to benefit both the marine environment and the tanker industry.

London P&I confirms premium hike: In line with industry predictions, in its advance call for the 2003-04 policy year, the London P&I Club has ann-ounced a general increase of 25 per cent, while supplementary calls for all open underwriting years remain unchanged.

Paul Hinton, the chief executive of A Bilbrough & Co. (the managers of the Club) commented, "The almost unprecedented failure in the last three years of the investment markets to produce budgeted returns means that a substantial upward correction of premium levels has been required.

"Considerable progress has already been made but, in the context of continuing investment market uncertainty, more needs to be done. Any increase in the cost of the Club's share of the International Group's excess loss reinsurance programme, which has not yet been determined, will also apply. Advance and supplementary calls will continue to be levied in instalments on the same basis as applies in the current year."

While acknowledging that the decision to raise premiums would be unwelcome news for members, Hinton said the Club Committee was nevertheless firmly of the view that it was in the best interest of both the Club and the members that the financial position of the Club remained sound.