UK P&I Club - Issue 21 - February 1998

UK CLUB NEWS is published by
Thomas Miller & Co. Ltd.

International House
26 Creechurch Lane
London EC3A 5BA

Tel +44 20 7283 4646
Fax +44 20 7283 5614

For and on behalf of the Managers of

The United Kingdom Mutual Steam Ship Assurance Association (Bermuda) Limited
The United Kingdom Freight Demurrage and Defence Association Limited

Go ahead in Taiwan

Taiwan is the latest link in the UK P&I Club's worldwide chain of offices. Transport Mutual Services (Taiwan) will provide claims handling and advisory services to the shipping community from February 20th. The company will act on behalf of existing Taiwanese Members, and claims handling will be transferred from Syndicate A1 in London. The new office will also carry out the correspondent work formerly performed by Taiwan Maritime Services. Transport Mutual Services (Taiwan) will report to Thomas Miller (Asia Pacific) in Hong Kong.

The operation will be headed by barrister Tamon Tseng, called to the English bar in 1985, supported by his colleague Adelaide Yang. Both have extensive experience of correspondents' work with Taiwan Maritime Services.

Mark Carter of Thomas Miller (Asia Pacific) said the UK Club was determined to provide those on-the-spot Club services for shipowners and charterers which were previously lacking. “In recent years, Taiwan has proved a strong growth area within a growth area, with a reputation for stability and quality tonnage.

“We believe Taiwanese shipowners will appreciate receiving the Club's services from experienced local staff in their own language. At the same time, we will learn what further steps we need to take to become the leading provider of P&I cover to such an important shipowning community.”

There will be an opening function for the shipping community in Taipei on March 12th.

New Branch for Singapore

A new Branch of the UK P&I Club is being set up in February to look after Members based in South East Asia. The Branch will be established in Singapore and managed by the newly formed Thomas Miller (South East Asia) Pte Ltd

Initially, claims will continue to be handled by Syndicate A1 in London under the supervision of the Singapore Branch. However, in consultation with the Members entered through the Branch, the responsibility for handling their claims worldwide will be transferred gradually to the region.

The Branch will issue guarantees, provide on-the-spot advice, 'trouble shoot' on significant claims, provide guidance on loss prevention and carry out other activities. There will be a broad remit to continue to attract entries from high quality South East Asian operators and to promote the interests of the Club and its Members in the region.

The Branch will be headed by Nick Sansom, who moved to Singapore at the beginning of the year. He will be supported initially by Laurence Ng and by a claims manager. Further appointments are expected later in the year.

The Club's South East Asian entry amounts to more than 4.5 million tonnes, spread across 22 Members. The largest fleet is Neptune Orient Lines.

For 1998, the responsibilities of Thomas Miller (South East Asia) will focus on P&I Members in Singapore. The following year they will be extended to Members in the other countries in South East Asia.

Nick Sansom explained: “Given the growing importance of Asia Pacific in shipping and the UK Club's policy of adding to its on-the-ground presence in key centres, we are delighted to be setting up such an important branch office. This increases our capacity to operate in different time zones within easier travelling distance of Members.”

Speaking the language

In recent years, the UK P&I Club's managers have been recruiting gifted linguists into the business and helping them to improve their skills. Most graduate entrants speak at least two modern languages and many have benefited from comprehensive learning programmes covering the mainstream maritime languages of Arabic, French, German, Greek, Italian, Mandarin, Russian, Spanish and Turkish.

“The people with whom today's P&I executive has to do business represent an infinite variety of skills, occupations, nationalities and languages,” says Jane Cooper, Thomas Miller's Group Director of Learning. “Gone are the days when London-based managers could expect to communicate predominantly in English.

“Accordingly, we have been systematically equipping our people with the appropriate language skills since 1994. Our programmes cater for people with a high level of competence who wish to maintain their capability and for those who need to learn or develop a language because of changing area responsibilities.”

Millers provide an open learning centre featuring CD-ROM packages, interactive video disks, video and audio tapes, books, newspapers and journals. There is regular one-to-one coaching, weekly group classes for different levels and intensive programmes.

Jane Cooper regularly monitors feedback on the differences language learning makes to day-to-day executive work. “The benefits include better Member relations, increased productivity, saving on the use of translation services and quicker, more effective handling of documents and correspondence.

“Speaking a second language competently is widely regarded as an important asset enabling people to improve basic working skills significantly.” continued Ms Cooper. “We also encourage people to learn a language for pleasure because we believe that language learning is essentially about enhancing an individual's communication skills. We want people to become both competent and confident in speaking languages and to have fun in doing so.”

Members keen on new offices

Two surveys of Members' needs have provided important stimuli to an expansion of the UK Club's network and to the extension of its activities.

The 1992 and 1996 surveys were designed to find out what shipowners and charterers felt about the terms, services and advice they were receiving – and what they were looking for. Members came out strongly in favour of regional offices providing key services. Demand for such offices was above average in Greece, Asia Pacific, Australia and Japan.

General advice and support, authorisation of guarantees and approval of claims were major priorities. High quality service, financial strength and security, quick response and action, and positive personal contacts and working relationships were all deemed significantly more important by Members than they had been in 1992.

The size of the UK Club was seen as a particular asset. Service Director Herry Lawford pointed out: “With nearly one-fifth of all merchant tonnage on our books, the UK Club enjoys economies of scale which enable us to provide an increasing range of services, unmatched by any other club. Our biggest and smallest Members have told us how much they appreciate this.”

In the 31/2 years separating the surveys, the level of overall satisfaction with the service provided by the UK Club rose from 77 to 84 per cent.

Nine out of ten Members placing part of their fleets with other clubs said the UK Club was as good as or better than other clubs in respect of general advice, claims handling and promoting Members' interests.

PSC Guide available

Port State Control – A Practical Guide, produced by the UK Club, will be sent to Members at the beginning of February. It is a comprehensive guide which highlights the growing importance of the subject to shipowners and mariners. There is a full version for office use and a shorter guide for ships' masters.

Another cut in reinsurance

The International Group of P&I Clubs has achieved a further reduction in the cost of its main reinsurance contract from 20th February 1998. An overall reduction of about 18 per cent for 1998 followed reductions of 40 per cent, 15 per cent and five per cent at the last three renewals.

The Group has also maintained its twin strategies of increasing the risk retained by the Club's Pool and developing an alternative market for reinsurance.

The first layer of the reinsurance contract, which covers claims from US $30 million up to US $500 million, will cover 75 per cent of the risk, compared with 85 per cent in 1997/98. The International Group is retaining a co-insurance share of 10 per cent, while the remaining 15 per cent is reinsured on a new policy, with the Group retaining a higher deductible of $50 million.

Placement of the main reinsurance contract — including the upper layers placed 100 per cent with the market underwriters — will be handled by the Group's traditional reinsurance brokers, Miller Marine. Brokers Greig Fester – a subsidiary of the Benfield Greig group – are responsible for developing the new contract excess of $50 million.

Stephen James, Chairman of the International Group's Reinsurance Sub-Committee, said “We are delighted with the achievements of both our brokers at this renewal.”

London – first among equals

The regionalisation of the UK P&I Club's services into the three major time zones – the Americas, Europe and Asia Pacific – and the development of offices in key maritime centres worldwide has led to services once performed entirely in London being carried out in other locations. Yet London continues to play a vital and sometimes exclusive role in the Club's affairs.

Today, the Club's regional offices variously provide a very wide range of services to Members, as well as gathering marketing and other information related to the Club's quest for high quality tonnage.

Worldwide claims management is now carried out in the New Jersey and Hong Kong syndicates and, for certain Greek Members, in Piraeus. However, most syndicate work continues to be done at the London office in International House, which provides the focus for a number of activities.

“That certainly is not the case nowadays. In recent years, we have deliberately devolved responsibilities and workloads to leading maritime centres. In the past two years, the impetus towards such change has accelerated. However, it is worthwhile reminding ourselves that many activities have to be co-ordinated through a single centre if we are to enjoy economies of scale in our operations and the best possible deployment of our skills.”

“We are fostering a cultural change through hiring experienced staff locally and developing the language skills of our people in general,” continued Mr Lawford.

“We can regard London not so much as an all powerful headquarters but as a facilitating operation – a sort of first among equals.”

Greece – an extra dimension

The expansion of Thomas Miller (Hellas) in Piraeus provides an extra dimension to the service offered by the UK Club in one of the world's leading shipping centres. Established at the beginning of 1996 as an advisory office, Thomas Miller (Hellas) has reacted to Members' requests for on-the-spot services.

Since January 1st, the office has been acting as correspondents for the Club in Greece. From February 20th, it will house a claims handling syndicate, dealing with claims worldwide from a number of Greek-based Members.

Peter Wright, Chairman of Thomas Miller (Hellas) explained: “The Club has around 23 million tonnes of Greek merchant vessels on its books, spread across some 180 owners and charterers. This represents about 30 per cent of the country's fleet. We have been dealing with Greek operators since the late 19th century and leading figures in the country's shipping community have always played an active role in the Club's affairs.

“We have been at pains, therefore, to provide the services required over a long period. The latest developments are very much in line with that approach.”

The correspondent work will be carried out by Evangelos Nomikos and Takis Alikaris, both formerly with Maritime Services, the Club's previous correspondents in Greece. The claims handling work will be headed by Tony Fielder until Daniel Evans moves from the London office to join the company as syndicate manager later in the year. Tony Fielder will have the senior claims consultancy settlement and guarantee authorities which he enjoys as a Member of the P&I Claims Team. He is an oil pollution and major casualty specialist who joined Thomas Miller in 1990 after extensive experience of marine cases as a solicitor. He will be supported by Maria Tierris and Alex Couvadelli, both doubly qualified as Greek and English lawyers, who have been working with the Club's London-based syndicates. Daniel Evans is a solicitor with New Zealand and English qualifications. The company's other functions will include explaining Club policies, providing ad hoc advice and acting as a feedback channel for Members' views and requirements.

America – expanding horizons

To meet the requirements of its Members based throughout the Americas, as well as those of other Members trading with the region, the UK P&I Club's activities and services have developed considerably in recent years.

The United States continues to have a particular importance for shipowners and charterers. This reflects the huge volume of trading activity, the country's individualistic approach to maritime legislation and regulation, and the sometimes severe financial consequences and unpredictability of litigation.

About one quarter of claims by number and value occur there, which means the insurance costs associated with dealing with the US are greater than for any other country.

“This has been a major factor in propelling our whole operation in the Americas towards enhancing the claims and advisory service for Members of the UK Club, both based in the Americas and trading with the region” said Tom Bradshaw, President and CEO of Thomas Miller (Americas) Inc. ”We have been expanding our horizons to meet Members' requirements.”

1979 The Club decided that maritime conditions, claims levels and legal practices required a US based exclusive correspondent. The result: Transport Mutual Services Inc., based initially in New York.

1995 June TMS remit expanded to encompass all North and Central America, Mexico and the Caribbean.

1996 February TMS became a working claims syndicate, handling American, Canadian and Mexican Members' claims worldwide.

1996 July Thomas Miller (Americas) Inc created, along with wholly owned subsidiaries.

Collectively, Miller's North American offices handle major casualties, post security to avoid delay or detention of ships, handle claims, appoint attorneys and monitor their performance and costs, monitor legislation, and liaise with government and commercial agencies. The total continental case load is running at around 5,000.

The Jersey City headquarters, under Chairman David Martowski and Tom Bradshaw, supervises the whole of the Club's Americas activity. TMA in New Jersey provides claims handling and other services for the east coasts of Canada and the USA, plus the Great Lakes.

The Miami office, managed by Larry Jacobson, has just expanded from six to twelve staff and includes several fluent Spanish speakers. They cover Florida, the Gulf, the Caribbean, Central America and now South America.

The decision to switch the guarantee, claims handling and advisory functions for the South American Members from London followed a three-month trial period carried out by Area Manager Lance Hebert. It confirmed that face-to-face contact and servicing within their time zone was a primary requisite of South American owners and charterers.

The San Francisco office, managed by Andrew Morgan, provides claims handling for Mexico, the US and Canadian west coasts, Alaska and Hawaii.

Loss prevention seminars and workshops have proved particularly popular with Members, not least those with cruise ships, which are dealt with largely through the Miami and San Francisco offices. Seminars and workshops on ship construction, refrigerated containers and pollution have been very well attended.

In Canada, the USA and Mexico, the UK Club has around 7.25 million tonnes on its books, spread across some 680 vessels, plus a significant time charter membership. For South America, the equivalent figures are 3.7 million tonnes and 185 ships.

“The recent increase in the UK Club's membership based in North America reflects the growing desire for owners and charterers to be able to communicate with Club managers during their working day and at their convenience,” said Mike Jarrett, Executive Vice President, TMA and Area Manager for North America, based in Jersey City. “Our aim is to ensure that Club Members receive the very highest standard of service at the lowest cost.”

Pollution law expertise

Dr Chao Wu, environmental law adviser for Thomas Miller (Americas) Inc, is one of the world's leading experts in marine pollution law. She supports claims handling syndicates and other colleagues in providing data and advice to Members in North America and other parts of the world. Dr Wu is a regular contributor to international shipping seminars. Dr Wu has published Pollution from the Carriage of Oil by Sea, subtitled Liability and Compensation, the most comprehensive and up-to-date book yet produced on the subject. Published with the support of the UK P&I Club, it describes the system put in place by international conventions and voluntary agreements, particularly the IOPC Fund compensation policy; and the unilateral approach adopted by the United States. The book was awarded the 1997 British Insurance Law Book Prize.

Keeping tabs on the experts

With legal fees in the US always a concern for shipowners, Thomas Miller (Americas) staff have devoted considerable efforts to their instructions to lawyers and to monitoring their performance

While the bulk of Members' claims are resolved 'in house', US lawyers alone cost the Club around US$10 million a year in fees.

It is, therefore, incumbent on the management to explore every possible avenue to control legal fees and expenses and to maintain a good working relationship with the legal community in order to obtain best value for money. In 1995, Instructions to Attorneys was issued to all attorneys in North America, setting out reporting procedures and guidelines for billing. Copies of these instructions are available from any TMA office.

“Having a significant presence in North America has allowed us to develop an unrivalled knowledge of the strengths and weaknesses of lawyers, surveyors and other experts,” explained TMA Executive Vice President Mike Jarrett. “Our first hand experience enables us to select the right expert for each case. Such specialist knowledge, which benefits all UK Club Members, is only obtained by having a comprehensive operation in North America and by taking an active role in each claim.”

A full review of the correspondents' network in North America is planned by TMA during 1998.

Jakarta and Manila host seminars

Two seminars on marine liabilities have been staged by the UK P&I Club in conjunction with the Indonesian and Philippine Shipowners Associations.

Nearly 100 shipowners, charterers and brokers attended the Jakarta seminar while around 70 came to the Manila function. Topics covered by UK Club managers included an introduction to P&I, risks, underwriting, STCW, hull insurance and ship management. The video 'Counting the Cost' was shown at both venues.

The Jakarta session was opened by Dr. H. Firdaus Wadjdi, Chairman of the Indonesian Shipowners Association and the Manila event by Carlos Salinas, President of the Philippine Shipowners Association. Lamberto Pia, Deputy Administrator of MARINA, delivered a paper on the application of the White List on manning in the Philippines.

Charles Elmer, Area Manager, South East Asia said the UK Club's initiatives were particularly welcomed by shipowners and charterers who said it was rare for P&I clubs to hold such events.

Japan Branch helps Club to be the best informed

Since 1989, the UK Club has offered a steadily expanding range of advice and services to Japanese-flagged Members and to the country's shipping community as a whole

The Club's Japanese tonnage, including ships insured through the Branch, amounts to 10 per cent of the total Japanese fleet. Members include NYK Line, Mitsui OSK Lines, Tokyo Tanker, Sanko Steamship, Tokai Steamship, Nissen Kaiun and leading ship managers.

On-the-spot advice, interpretation of Club policy and rules, loss prevention assistance and access to the Club network of offices and correspondents worldwide are amongst the main services. Japanese Members require a great deal of detailed information on the maritime industry and the Japan Branch prides itself on helping to make the UK Club the best informed in the world. It makes extensive use of the Miller Encyclopaedia and the Environmental Encyclopaedia – which is also available directly to the Club's Members via the Internet. The branch also issues the only other UK Club News – UK Club Japan Branch News – in Japanese.

There are four full-time employees, led by Moto Sugiura, who was appointed Branch representative in March 1997.

A law graduate, he has worked for Dodwell & Co. and Inchcape P&I. He is supported by Fumiaki Izawa and Masako Kodaki.

The Japan Branch is co-located with the UK Club's correspondents in Japan. Inchcape P&I, with whom it works closely.

Herry Lawford, Service Director of the UK Club, said “the Japan Branch exemplifies the qualities we are establishing in our offices around the world – immediate local response and autonomy, coupled with full access to the Club's network of information and services worldwide.”

Asia Pacific – exciting and expanding

The UK P&I Club's activities in the Asia Pacific region have moved ahead in leaps and bounds in recent months

Tonnage entered from the region has increased to around 23 million, spread across Japan, China (including Hong Kong), Taiwan, South Korea, Singapore, Malaysia, Thailand and the Russian Pacific Coast fleet.

The Japan Branch and Hong Kong office have been established for some years. However, with Hong Kong's recent expansion, the opening last year of offices in Shanghai and Beijing, and the imminence of a Singapore Branch and a Taiwan operation, the UK Club is in the middle of a period of unparalleled expansion.

Hong Kong is the hub for much of the Club's activity outside Japan. A P&I office was created in 1996, based on the Club's Hong Kong correspondent Throughtrans Services (Asia) – now known as Transport Services (Asia).

In October 1997, Hong Kong began handling claims concerning ships entered locally, wherever incidents occur. Although London has retained an advisory role, the move recognised that owners and charterers required an on-the-spot service which could not be carried out quite as well from the UK.

Felix Pak

As managing director of Transport Services (Asia), Felix Pak continues to oversee the Club's affairs in Hong Kong, China and Taiwan. He has been associated with Thomas Miller since 1984. He is supported by regional manager Sid Lock, who has extensive experience of shipping, underwriting and claims management in the region.

The UK Club had been doing business in China for 20 years before opening the first representative offices of any mutual club in Shanghai and Beijing.

The Shanghai office is the main point of contact for the Club's non-Chinese tonnage in the port, as well as the focus for the Club's liaison with Members in China, with Chinese government authorities and with service providers, such as claims handlers, correspondents, surveyors and lawyers.

The Beijing office maintains relation-ships with major Chinese Members headquartered in the area and with various major players such as China P&I and the People's Insurance Company of China.

Shanghai is headed by Mr He Yu-Feng, a law graduate, who worked in Shanghai's Maritime Court before joining Millers. Beijing is supervised by Mr Han Bing, a languages graduate and former branch manager with the Chinese state forwarding company Penavico in Shantao.

Mark Carter, formerly general manager of Thomas Miller P&I in London, has been seconded to the region to support these developments. “These are exciting times for shipping in the Asia Pacific area, with newbuilds, refits and repairs surging ahead in many ports. They are also exacting times as rules and regulations tighten, with safety assuming ever greater importance. All this points to the complexities of the advice and services Members need and the consequent necessity of having skilled people close by in their own time zones.

Transport Mutual Services Pty Ltd continues to act as the Club's general correspondent in Australia for all the Club's Members trading with the region. The Sydney office is staffed by general manager Barton Phillips and Marcus John, both solicitors with substantial maritime law experience.


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