ITIC Forum 2004

IT may only have been four years since the 2000 ITIC Forum, but it has been a busy four years. During that time not only has the Club’s membership risen from 1,200 companies to 1,800, but premium income has also increased from US$19m to US$33m.

ITIC’s Forum 2004 proved to be a truly international affair, and reflected the true diversity of the Club’s membership. The Forum was attended by over 270 Members, coming from all corners of the globe, including ship agents, shipbrokers, ship managers, surveyors, consultants and other industry professionals.

Held at The Dorchester Hotel in London on 28-29 September, 2004, the opening day of the event was a general forum for everyone, under the ruthless chairmanship of John Guy. Paul Vogt, who has chaired ITIC since its formation in 1992, set the tone of the day saying that “the purpose of ITIC is to protect us from the consequences of our mistakes”. Judging by the number of issues raised during the two-day event, it’s not hard to see how and why mistakes do happen.

One of the most thought-provoking issues raised on the first day concerned money laundering. David Chopping, Technical Services Partner at accountancy firm Moore Stephens, gave a sobering presentation on the new money laundering rules that now apply to all transport industry intermediaries in the UK. Despite severe penalties being in place for those who fail to comply, only two members of the audience were even aware that their companies had money laundering compliance procedures in place.

Still on the subject of compliance, Per Christensen, Chief Executive Officer of Hudson Marine Management Inc, predicted that ISPS enforcement in both the USA and the EU would strengthen considerably over the next six months. “Expect to see over 170,000 US officials without much knowledge of shipping but with a lot of power to be engaged in this enforcement,” he warned, and added “stop complaining about the legislation and get on with complying strictly with it.”

Ugo Salerno, Chief Executive Officer of classification society RINA, also caused a stir by explaining how class is expanding into what he describes as “gaps in the market where industry wants service” such as coating supervision, which individual consultants and surveyors see as their areas of business. Although it did provoke a lively debate, Ugo was keen to point out that RINA had no intention of impinging on the territory of professionals already operating in that field.

One group of intermediaries who know only too well what it is like to have to defend their territory are ship agents. Simon Morse, Chief Executive Officer of Inchcape Shipping Services, spoke on day one on the future role of the agent. He struck a cord with much of the audience when he said that agents live and die by the speed and integrity of the information they provide. Not quite as many embraced his prediction of greater consolidation in the agency sector in the future.

Rounding off a day of lively debate, delegates were whisked off on buses for a tour of London followed by a cocktail reception and barbecue in the stunning setting of the Kensington Roof Gardens, the glamorous playground of Richard Branson’s Virgin empire. A warm late summer’s evening provided the ideal ambience for delegates to unwind, network, discuss the day’s events with the Club’s directors and managers and enjoy the (rather loud) sound of a Beatles tribute band.

Day two was divided into four separate forums with programmes aimed specifically at ship agents, shipbrokers, ship managers, and surveyors and consultants.

The largest group of delegates attended the ship agency forum, which was chaired by Bjorn Engblom, Group Executive Chairman of GAC, and included wide ranging topics, including the ISPS Code, planning for divorce in agency agreements and a workshop where delegates had to consider the conequences of the issuance of switch bills of lading.

Scott Jones, President of General Steamship Agencies, tackled the thorny subject of whether a future exists for the independent liner agent. “My feeling is that there is a future for a handful of very nimble independents in the developed world” Scott said, and added “their future clearly lies only with the smaller carriers operating in “niche” or regional trades”.

Bjorn Tonsberg, President and CEO of Barwil Agencies A/S, talked about the future of the port agent. His allocated topic was “Diversify or Die?” but, in Bjorn’s view, the port agent has to “Add Value or Die”. “Diversification isn’t the answer. Stick to your core business but find ways and means of adding value to your customer base.” Bjorn felt that “the old traditional port agent will slowly but surely die”.

The shipbroking forum was also particularly well attended with presentations covering everything from loss prevention to derivatives. Sîan Heard, of Heard & Co Solicitors, gave a useful and enlightening presentation on the need for well-drafted employment contracts. “The balance between incentivising employees and protecting the business when a valued employee leaves is one of the most difficult challenges facing any competitive employer,” said Sean. “This is particularly the case in the shipbroking world where the sharing of information and transparency is crucial.”

Jeremy Biggs, a solicitor with Ince & Co, also offered some words of wisdom concerning the Contracts (Rights of Third Parties) Act 1999. The Act, which was first aired in the High Court in the landmark case of 2003, Nisshin v Cleaves, enables shipbrokers to bring a direct action against owners for brokerage. However, as Jeremy pointed out, owners are becoming more and more aware of the Act and exclusion clauses are starting to creep into contracts – something brokers should pay close attention to.

Something else brokers should pay more attention to is their role in the industry, according to Alan Marsh, Managing Director of Braemar Seascope plc. “We shipbrokers should always remember that we are the lubricating oil of the business. It is we who ensure that the market information is correctly and honestly distributed to the right people at the right time”. But, according to Alan, shipbrokers can sometimes give away their information too cheaply. “I don’t think we recognise fully the value of the information and our expertise when we compare ourselves with other ‘professionals’.”

The ship management forum also offered much food for thought, particularly from Pradeep Chawla of Anglo-Eastern Ship Management Ltd, who called for ports to take much greater responsibility for security in the wake of the ISPS Code. According to Pradeep “seafarers have become the first line of defence in the fight against terrorism”. “Is this the job of the seafarer?” he asked. “It is only a matter of time before a serious incident takes place because seafarers are too busy checking ID cards.” Instead he called for the industry to put ports on the front line of defence and ease the burden on the crew.

This raised the interesting and little-debated point of whether dry dock facilities are covered by the ISPS Code. As they are often located outside the port with contractors coming and going all the time, do they not pose an even easier target for terrorists than ships in the port? asked one delegate – a question that remained unanswered.

Given the raft of shipping compliance issues facing intermediaries today, Per Christensen of Hudson Marine Management Inc. gave a timely comparison of the use of consultants versus buying a compliance system off the shelf. According to Per, while there are some areas in which only a specialist consultant will do (such as port security assessments) adopting a do-it-yourself approach can help ensure that those using the system not only fully understand it but embrace it too.

Expert witnesses, claim notification and negligence took up much of the morning at the well-attended consultants’ and surveyors’ forum. Proving to be quite a highlight of the two-day event was the fascinating presentation on the salvage of the TRICOLOR given by Ivar Brynildsen of Wilhelmsen Insurance Services. This was hotly followed by a mock mediation of a professional negligence dispute. Expertly penned by ITIM’s Mark Brattman (who had a cameo role) and narrated by Peregrine Massey, Chairman of ITIM, the starring roles went to Silas Taylor of solicitors AMJ, who played the mediator, Tony Payne, Managing Director of ITIM, who played the lawyer-loathing tank owner, and Ian Biles, of Maritime Services International, as the unfortunate tank surveyor.

The mediation followed a dispute between Tony and Ian. A tank, owned by Tony and inspected by Ian, had sprung a leak while full of oil. Tony, out of pocket to the tune of £450,000 for repairs, clean up costs and lost contracts, was now pursuing a claim against Ian for costs. Lively, entertaining, and often hilarious, not only did it give a very useful insight into how the mediation process works, it also provided delegates with some light relief after a long day.

The event came to a close with a sumptuous dinner at the Four Seasons Hotel just down the road. Guests were greeted with a glass of champagne and a £1,000 note. Sadly the money wasn’t real but it did get the gambling off to a good start with the three roulette tables kept almost as busy as the champagne top-up staff. Once the guests had lost their fake £1,000 they were invited to gamble with their own money. The combined “winnings” of £300 were donated to the Save the Children Fund.

The entertainment continued with a lively pianist, a typical taxi driver’s monologue from Fred Housego, and superb singing by Wendy Whalley of the ITIM accounts department. A relaxing evening was had by all and was a fitting end to another successful ITIC Forum.