Barratry, in maritime terms, is defined as an unlawful breach of duty on the part of a ship’s master or crew resulting in injury to the ship’s owner. We do not stand for such a things at Lloyd’s List. But our roving correspondents have run across a retired master who bears the name of the crime and who, it turns out, is irrepressible in questioning authority where it needs pricking in all things from regulation to finance to piracy. Since we couldn’t contain him, we thought it best to give this irascible mariner his corner. Barratry’s is an irreverent place, designed for opinionated takes on daily maritime news, and where the only unwelcome opinion is a conventional one. We invite you to join the discussion. Learn more

Carriers and customers set for a Pacific punch-up

By Bill Barratry | Published: March 7, 2011

THE annual negotiating season between US shippers and container lines on the transpacific has become quite a show in recent years.

The most frequently employed adjective in the press, as it counts down the days to what is surely liner shipping’s standout conference — the Trans-Pacific Maritime Conference — is “bruising”.

Lines and their customers are described as having “bruising encounters” in the corridors of the Long Beach convention centre, and other allusions are made to boxing, battles, phoney wars, all that sort of thing.

Judging by the atmosphere at last year’s conference, there is some genuine antipathy between some members of the two sides. That is hardly likely to have lessened over a rollercoaster 2010, which saw shipboard capacity severely restrained. That, in combination with a shortage of containers, posed some difficult logistical challenges for shippers.

Carriers predictably took advantage and increased rates by up to 50%, which went a long way to producing the industry’s record results, but the way in which capacity remained tight for such an extended period of time, by all carriers, led shippers to accuse them of illegally colluding.

A Federal Maritime Commission fact-finding mission found no such thing, but one suspects that should trade volumes not be as healthy this year, shippers will be keen to exact their revenge; and one’s sense is that volumes are not going to be as strong as carriers claim.

Why? Because carriers are talking up space shortages already, and their language is as if it is a near certainty, whereas if recent history has taught us anything it is that the only reliable thing about trade predictions is that they are sure to be inaccurate.

The fundamental dynamics of the transpacific remain the same, unfortunately for carriers — the dominant factor is the American consumer, and everything one reads and hears about him suggests he is having a tough time of it.

Yes, the Dow Jones continues to trade strongly, but the suits in Wall Street do not shop in Main Street, and every other indicator I see is that Americans are dealing with decreasing amounts of disposable income as housing prices remain stubbornly low and energy prices soar.

That does not seem to me to be a good basis on which to begin negotiations with one’s customers. Sorry to see the glass half-empty, but will it be bruising? You betcha.

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Who can handle IMO’s hot potatoes?

By Bill Barratry | Published: March 4, 2011

THE race is on for the man, or woman, to replace Efthimios Mitropoulos as secretary-general of the International Maritime Organization. The lucky successor will need to have their wits about them, as they could be handed a couple of hot potatoes.

There has been little doubt about Mr Mitropoulos’ capabilities — but during his eight-year tenure at the top, he has not managed to resolve one of the biggest questions the IMO has ever faced: how to handle the issue of greenhouse gas emission reductions.

Currently the list of potential candidates is the Philippines’ Neil Ferrer, Cyprus’ Andreas Chrysostomou, Spain’s Esteban Pacha, Japan’s Koji Sekimizu, Korea’s Lee-Sik Chai and Nigeria’s Monica Mbanefo.

They may choose the diplomatic route in which the United Nations Framework Convention on Climate Change appears to be wallowing — or they may take a more robust approach. Mitropoulos has tried, but his attempts have been tied and his success limited.

The more mechanical, practical measures for reducing an individual ship’s emissions could well be his swansong — and this is something the IMO is already waving at the world to prove it can at least do something.

Developing market-based measures is another kettle of fish. Capt Chrysostomou has been forthright in handling green arguments as chairman of the Marine Environment Protection Committee, but has he managed to push the issues fast enough? Another problem for him may be his nationality. Many are thinking it is time for an Asian head of the IMO. If Capt Chrysostomou, as a Cypriot, follows Mr Mitropoulos the Greek, it may be seen as too old school. Spanish Capt Pacha, secretary-general of the International Mobile Satellite Organization, could face the same obstacle.

If the IMO council favours an Asian secretary-general, this leaves the chairman of the maritime safety committee, the director of the IMO safety division and the chairman of the legal committee as candidates. Ms Mbanefo, director of the IMO’s technical co-operation division, is seen by some as an outside runner.

Do any of these candidates have the strength of character to push the member states together and formulate a solution — or even suggest the IMO cannot deal with developing a market-based instrument?

There are many other issues the IMO is addressing, not least piracy. Which candidate would be best to tackle that problem? What solutions would they advocate? Hopefully more than a ream of paperwork ‘condemning acts of piracy’. Pirates are not known for perusing the IMO’s legendary documentation.

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Middle East upheaval will change view of shipping

By Bill Barratry | Published: February 25, 2011

YOU would have to go a long way back in my career to find political events that are such a game-changer — as the Americans like to call it — as the recent upheaval in the Middle East.

It is normally tempting to think of shipping as somehow insulated from the outside world, as if the movement of goods across the high seas is a constant perennial, whatever the ebb and flow of geopolitical situations. Out on the oceans, the whims, wishes and battles of man seem a long way away.

One has to deal with the dynamics of crews, of course — which, as every seafarer knows, can sometimes be a real pressure cooker. But that is internal to the ship and any master worth his salt has that under control.

What happens on land is way above our pay grade, but it has a massive effect on what we do, of course. Some ships were going into Tunisia and Egypt as their revolutions were getting under way, but they were not able to do so for long.

The problem is the ports: that’s where the bottleneck always happen, the point at which land meets sea. In the case of both Tunisia and Egypt, the ports were open for ships to call, but there was nowhere for the cargo to be stored. In both cases, as the streets outside the port gates became increasingly dangerous, there was no way cargo owners wanted their goods to leave the relatively secured areas inside the port premises. Once on the roads, trucks would be an easy target for the gangs of looters, whether they dressed in uniform or not.

As a result, the cargo piled up in the ports of Rades, Alexandria, Damietta and Said, to the extent shipowners began to cancel calls because there was nowhere for the cargo to be stored. Even if there had been, in the latter stages of the protests it wouldn’t have made any difference because few dockers, agents, customs inspectors and port authority management were able to get to work anyway.

Make no mistake, the supply chain pressure was building; had Egypt’s Hosni Mubarak, for one, clung on to power for longer, this would have made itself felt in faraway docks.

This is by no means the end of it. Libya is burning — and who knows what damage Moammar al-Gadaffi will wreak on his poor people and the country’s shipping infrastructure; Yemen, with its vitally important port of Aden, teeters; the problems in Bahrain have by no means gone away; and the grumbles in Saudi Arabia appear to be growing louder.

Shipping is going to look very different after all of this.

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Where there are people there is scope for corruption

By Bill Barratry | Published: February 24, 2011

THE mob is still at it, or so one would believe judging by the recent spate of arrests going on at the New York and New Jersey docksides.
Late last year I turned my beady eye on the Waterfront Commission of New York, the corruption-busting body set up in the aftermath of a series of journalistic scoops detailing widespread corruption in the port in the early 1950s.
Last year, a New Jersey senator proposed disbanding the commission, but in the intervening period it has claimed its part in a number of high-profile arrests of mobsters doing what mobsters do: extortion.
In January, Nunzio LaGrasso, vice-president of the Atlantic Coast District of the International Longshoreman’s Association, was indicted on charges of bribery, corruption, conspiracy and money laundering.
Also arrested was a timekeeper at the Maher Terminal, Rocco Ferrandino, on the same charges, and LaGrasso’s nephew, Alan Marfia, a Newark police officer who allegedly used his access to police databases to obtain information on undercover police vehicles that were conducting surveillance near LaGrasso’s union office.
The case revolves around charges that dockworkers were forced to pay LaGrasso tributes out of their Christmas bonuses “to receive high-paying jobs, preferred shift assignments and overtime”, according to the Waterfront Commission.
The year-end bonuses are known in the union as container royalty cheques, and were mostly collected on LaGrasso’s behalf by Ferrandino.
It is alleged the extorted money was funnelled to the Genovese and Gambino crime families, and the arrests were part of a wider FBI mafia investigation that saw 127 people charged in January.
The extortion is nothing new — New York’s stevedores have been paying kickbacks for decades, and as I suggested last year, the port continues to operate like this much of the time.
Of course, the nature of dock work has changed considerably since the birth of containerisation, but where there is cargo there is theft, and where there are people there is scope for corruption — and the ILA has 65,000 paying members, 4,000 in the port of New York and New Jersey alone.
Most of them are honest, law-abiding citizens, to borrow a Hollywood cliché, and for law enforcement officials to subsequently call the strip between the container terminals at Newark and Newark International Airport “the most dangerous two miles in America” is, if you’ll forgive my cynicism, overreaction and hype.

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Putting shipping into a box is never going to work

By Bill Barratry | Published: February 21, 2011

THERE is the old adage that if you cannot measure it, you cannot control it. The saying is true apparently in shipping circles, as I see a plethora of indexes and indicators emerge.

Of course the International Maritime Organization has its formulas developed to show the world it can keep vessels’ CO2 emissions in check.

But there are a range of others — not directly related to CO2 — now emerging and being pushed forward by cheerful marketeers. Some relate to ship performance, some to safety and crew training and skills. Many also revolve around the vetting regimes.

There are people suggesting shipowners are being inundated with key performance indicators, efficiency indexes and vetting forms that often overlap in their content. These same people say there are too many of them and there needs to be standardisation.

This may be true, especially the CO2 indexes I have come across that all purport to be in a position to save shipping from itself. But there is need for a little cheer here. The fact there are so many means the owners — many who helped support developing indexes and KPIs — are getting behind them and are keen to control the environmental inefficiencies onboard their prime assets.

As one Greek owner said recently, shipping has not changed; we still take the cargo from one place to another in ships. Itis the ability to see trends that is helping owners get to grips with these inefficiencies.

I am not too worried about the plethora of indexes. The market will sort the winners from the losers. If a system costs too much, owners will not use it. If an index is seen to be forced upon them for no particular reason, I see it being shunned.

But systems that shave the cost of ship operations, increase crew awareness and give more transparency for shipowners to see how his or her assets perform, will always be a benefit.

Many owners even have their own in-house KPIs. These will help see trends and changes, within a particular fleet of vessels. This is good.

Standardisation means boxing something up and setting limits, labelling things and potentially setting barriers to innovation.

The KPI systems that are merging, the fuel efficiency and environmental indexes that are being developed will all influence shipping — and they should be welcomed.

But there should be caution with too much standardisation because a ship is not just a ship, as those that have struggled to fit such a simple definition into the IMO’s energy efficiency design index have found out.

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US is wrong to treat seafarers as suspects

By Bill Barratry | Published: February 16, 2011

JOLLY good stuff yesterday from John AC Cartner, this paper’s guest columnist for the day, who spent the better part of 900 words detailing and castigating the unmitigated stupidity behind the US Transportation Worker Identification Credential programme.

To misquote an old salt, it is clearly the work of a bunch of complete twic-heads.

It won’t stop them, though. They will continue to push the burdensome red tape through, and it won’t just be them. Off the quaysides, the Customs and Border Police and Department of Homeland Security continue their harassment of the world’s seafarers.
Simply working on a merchant vessel and not possessing a United States passport — as is the case for the vast majority of seafarers who have the misfortune to be on a ship calling at a US port — is enough to engender suspicion in US officials, who often go by the maxim that a foreign national is an illegal immigrant unless he or she can prove otherwise.

Despite all the difficulties of working in the less developed ports of the world, despite all the corruption and bribery that goes on in those places, the common refrain among ship captains is that the most difficult country to make a port call is the US.

Almost every captain will be able to relate the story of being boarded by US Coast Guard, while vessel approaches its port, with guns cocked and ready to fire while simple passport and visa checks are made. It is as if these people somehow believe they are living in a Hollywood film.

However, according to a recent report from the US Government Accountability Office, the job that border officials currently do is not good enough. There are still gaps through which seafarers might slide through and illegally enter the US.

It is difficult to see how all the effort that is going to go into tightening anti-illegal immigration methods against seafarers will actually be justified by the results. Compare the numbers of seafarers absconding and deserting their vessels with the thousands of illegal immigrants coming over the land border with Mexico and targeting seafarers reminds one of the old “arranging deckchairs as the Titanic sinks” adage.

Every country naturally has a right to stop illegal immigration, and I am not for a moment suggesting that authorities in US ports neglect their duties.

However, the whole process could be done with a little less aggression, marginally more civility and a whole lot less red tape.

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The changing climate for capital-raising exercises

By Bill Barratry | Published: February 15, 2011

THE number of listed shipping companies issuing extra shares to gain some purchasing leverage has become quite noticeable of late.

As we stumble, somewhat blindly, out of the economic woes of the last two years, there have been recurring announcements on various exchanges as companies look to raise capital, often for “acquisition, consolidation or general operating purposes”.

This we take to mean that the big players are getting ready to start making purchases of tonnage or distressed companies that are
worthy but have a cheap share price, or that they hope to buy their way out of debt.

If you look back in history, you can see a similar trend, as companies made themselves a platform for the ensuing economic median, that period before the boom that leads to yet another bust.

So yes, here we go again, only this time the whole industry is settled on a tenuous precipice of mounting operational costs as environmental regulations and crewing requirements increase.

Welcome to the new shipping world. There are more companies being more open (they say they are, so it must be true), more companies hoping to make a good name for themselves (the fig leaf syndrome) and a slow reduction in obfuscation (this may be wishful thinking on our part).

We hear, almost weekly now, but daily whenever there is a climate change conference going on, that shipping is the engine of the world economy and the world economy is growing, so shipping has to do its bit to be greener while keeping the engine turning.

Hence all the arguments among lobby groups, ship registers and other politically mined bodies that are there to serve their own interests before any common good.

So while all these listed companies are pushing for extra capital to gain market share, they are also hoping to position themselves for when being environmentally savvy is more than just a requirement but an economic benefit.

The thing is that most have yet to be environmentally savvy. Most tell us that it is impossible to spend cash on being green because the bottom line is so weak that they cannot afford it.

Yet when the market gets going again and the engine of the economy is roaring, one can suppose they will use the excuses of 2007 and claim to be simply too busy trying to keep up with demand to be sending ships to off-charter drydock for costly upgrades and changes.

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Owners on the radar for Sharpeye’s piracy pitch

By Bill Barratry | Published: February 15, 2011

THE recent unrest in Egypt threatened to close the Suez Canal and force shipping round the foot of Africa and so avoid the pirate infested waters off Somalia.

It also raised the profile of the Northern sea route as an alternative should the Suez Canal’s operations be threatened again. A Norwegian minister joked about the lack of pirates on that route at a recent conference in north Norway.

It is amazing to see how Egypt’s civil unrest could have forced shipowners to do what they should be doing anyway, collectively shunning the Gulf of Aden, en masse setting higher prices for shippers and thus making the general public more aware of piracy.

It is the financial reasons that keep the shipowners on the same course via Suez and it is only money that the Somalis, crammed into motherships and skiffs, want. Piracy is a potentially lucrative business for private guards, insurers, lawyers and manufacturers of electric fencing and other deterrents that an owner can be made to believe they should have on board.

Now we have Kelvin Hughes with its Sharpeye, a revolution in technology and radar imagery and a great help as a navigation tool. It can, apparently, detect a pirate-laden skiff much better than its competitors.

“Not all radars are the same. Our Sharpeye solid state technology is exceptionally effective in detecting small targets, especially in high levels of rain and sea clutter, and can prove a valuable tool in the early detection of pirates,” a company spokesperson says in its latest marketing blurb.

He fails to say what a crew member should do when a suspect vessel is detected. One would assume look out of the window and shout for help.

For anyone with experience of sailing through the Gulf of Hormuz on a loaded oil tanker during the first Gulf war between Iran and Iraq, the memory of Iranian gunboats running out from the shore on dummy attacks, hidden by sandstorms, will be easy to recall.

Detection of a suspect boat would mean a short period of panic, a call to some distant naval forces patrolling the region, then possible relief as the radar target performs a high speed u-turn and vanishes back into the radar clutter.

Someone in the Kelvin Hughes sales and marketing war room has suddenly thought: “Hey, perhaps we can make a few extra sales here and make our seafarers feel safer.”

But first the owner has to buy and install the equipment, having justified it is not cheaper to avoid the Gulf of Aden. One assumed Kelvin Hughes has its radar set firmly on the shipowner.

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Battle for control of green rating schemes hots up

By Bill Barratry | Published: February 10, 2011

THERE is big business to be had in selling a service that can verify and formulate how efficient a ship is.

That is why many people seem to be coming out of the woodwork with a rating scheme. With so many now on offer, there needs to be consolidation.

Not unsurprisingly all of the ratings schemes use the energy efficiency design index created by the International Maritime Organization, mainly because the hard work has been done for them.

The EEDI, this flawed, clumsily named and oft maligned index, is one of only two forms of measurements we have. Its ugly twin sister is the energy efficiency operational indicator.

I am not against these two indices, I think they are a good starting point to reducing fuel consumption. As the old adage goes, if you cannot measure it, you cannot control it.

In case you did not know, the EEDI is a figure to compare the probable fuel efficiency of a ship’s design, so engine size, hull shape, propeller design and other physical factors are set against the designed cargo capacity, whereas the EEOI aims to put a figure on how well the ship is operated.

One thing that is good is that some companies are using the EEDI on existing tonnage, something IMO members decided not to do for political reasons.

I suspect countries with fleets of older tonnage baulked at the prospect of appearing dirty. Political diplomacy preventing an ideal solution emerging is hardly new, even among IMO members.

The indices that have emerged are well meaning, and target different users, but for the shipowners this could be confusing.

There is the clean shipping index for cargo owners, the ship efficiency index organised by the political lobby group Carbon War Room, there is Rightship’s index for bulk vessels and the BSR for containerships. There is also one for European ports to use.

There are aspects of the oil major vetting regime that are also relevant.

This overlap and pressure on shipowners could well lead to indices having contrary results. Some use only the EEOI and the EEDI, others keep them separate. Some include NOx and SOx and others are focused on tonne miles. The fact that some of these indices are being used by cargo owners to select efficient tonnage however should not be overlooked. This means customers are starting to take a harder look at shipping, particularly when it comes to signing contracts, so its only a matter of time before efficient ships become the expected norm rather than the exception.

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Wikileaks, the Environment and the stories behind the scandals

By Bill Barratry | Published: February 9, 2011

WHAT have Wikileaks and the UK government’s expenses scandal got in common? There was simply so much news from the various sources that it all melded into one long list of accusations; some petty, some serious.

All one remembers in the UK is duck houses and moats, without having any strong recollection of who it was that had done what exactly. The same with Wikileaks, except of course that the US was inevitably involved like some eminence grise in the background.

Some stories have been amusing, such as the IMO secretary general’s secret visit to North Korea, and some merely titillating, such as how a port has won a contract on the whim of a dictator, or how the US exerts pressure against Iran.

I’m not against these stories, but there comes a point when you think, oh no, another one. The UK expenses scandal stories poured out of the UK’s Daily Telegraph with tedious regularity. Some of definitely made good reading, but in the fourth month it was just boring.

The same is now true with Wikileaks. In trying to shine a light on malpractice and provide free speech, Wikileaks became the story as much as the facts it is making available.

I dare say the environmental debate in shipping is getting just as tiring for some. Time and time again the European Commission, the International Maritime Organization and the US Coast Guard reiterate commitments, drives and goals.

But there is the rub. The story now needs an extra kick to make shipowners stand up and look like more than meerkats staring at the horizon. Shipowners are already staring bleakly at a host of confusing regulations and the threat of more to come; there is an air of war fatigue setting in. Perhaps the big news ought to be good, like a back track on the more draconian of the sulphur rules.

If I had the money and inclination to turn to being a shipowner I would probably bin the idea after a look at what I was up against. Fair competition is one thing, an unwelcome regulatory playing field stifling entrepreneurial shipowning is another.

We journalists are not going to stop writing about what Wikileaks will offer, or what our parliamentary representatives are up to, nor will we cease to cover what the regulators are going to throw at the shipping industry, but I do have some empathy with those owners and managers who tell me they sometimes have the urge to just go back to bed in the morning with a headache. Stick with it, the good news may yet come.

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