P & I Clubs

What is P&I Insurance?

P&I stands for Protection and Indemnity. P&I is insurance in respect of third party liabilities and expenses arising from owning ships or operating ships as principals.

What is a Mutual or Club?

An insurance mutual, a Club, provides collective self insurance to its Members. The membership is comprised of a common interest group who wish to pool their risks together in order to obtain "at cost" insurance cover.The UK P&I Club, as a "not for profit" mutual, is therefore owned by its insureds. As it has no shares to issue, it does not need to make a profit or pay dividends.

The UK P&I Club

The United Kingdom Mutual Steam Ship Assurance Association (Bermuda) Limited - generally known as the UK P&I Club - is one of the oldest P&I Clubs. It is also the largest mutual marine protection and indemnity organisation in the world. The UK P&I Club insures nearly one fifth of the world’s total ships .

As a mutual association, the UK P&I Club has no outside shareholders and no financial links with other organisations. It exists solely for the benefit of its Members. As a mutual insurance association, the UK P&I Club is able to offer superior service, attention and coverage to its assureds.

The UK P&I Club is directed by the members themselves. Overall control of the Club lies with the Directors, who are elected by the Clubs' Members from amongst themselves. The Directors normally meet four times a year to formulate policy on calls, the scope of cover, finance and current industry issues affecting the P&I world. They resolve specific claims which may not fall clearly within the cover.

In almost all ports of the world, on-the-spot help and local expertise is always available to Members, and to the masters of their ships, from the Club's correspondents.

The Advantages of Mutuals over Fixed Premium Insurers

The P&I Clubs provide at cost insurance without profit. Fixed premium insurers aim to make a profit for their shareholders.

P&I Clubs have existed continuously for more than 140 years. Fixed premium insurers have no convincing track record of commitment to P&I insurance.

P&I Clubs provide the most comprehensive cover available including the right of the board to cover "omnibus" claims.

Importance of Marine Container Logistics strategies

Since the beginning of containerization , the shipping industry has shown enviable developments in increased productivity, vessel capacity, speed ,safety , reduction in service time and cost. Despite these achieved efficiencies, marine container logistics has been suffering from severe trade imbalances between the major trading regions..

Projections indicate that the container fleet size as well as the vessel size will continue to increase as the order book of all major carriers are quite big , though the present economy slow down will delay the release of new builds further. This is a clear indication that the volume of empty container need to be handled in future will increase considerably.

The problem of trade imbalances and repositioning of empty container will continue to be a serious transportation logistics issue. As per the available stats regarding strong trade imbalance between Trans pacific , Trans Atlantic and Asia Europe trades , the exports from Asia , the world’s factory, to America and Europe are 15 % and 9% respectively. Whereas the imports from the respective regions to Asia is 5% and 3.5% only.

India’s container handling capacity for international and domestic traffic is expected to reach 21 million in 2014, up from 9.1 million in 2008 according to Frost & Sullivan analyst’s report “ Strategic Assessment of Containerization Trends in India”. Our container trade registered an impressive double digit growth of 23% during the year 2007-08. With Indian trade growing 11-12% per annum, the insufficient port and other related infrastructures, will result in increased port congestions at major ports and will adversely affect container shipping industry.

Similar to the international container shipping industry, Indian ports too face serious trade imbalances and equipment storage, repositioning issues. The problem of import , export imbalance is very high in southern ports of Cochin , Mangalore and Tuticorin due to seasonal cashew imports from Africa. The east coast ports, Chennai and Kolkata too have similar issues.

To minimize the port / depot congestion and the equipment dwell time , carriers are forced to make logistic vessel calls to evacuate the excess equipments. Due to insufficient port / depot infrastructure and poor logistics management strategies of the carriers, the whole process of evacuation used to be cumbersome , time consuming and expensive. This situation demands for an empty container management strategy which rationalizes the repositioning, storage and maintenance of empty containers in major importing regions.

India’s productivity growth is very strong and this is surely an indication of the robust growth of container shipping industry as well. In the present economic scenario, India is emerging into the spot light due to the stable economy and steady growth rate. Also the upcoming Vallarpadam International Transhipment Terminal and the proposed Vizhinjam terminal is expected to position India as a transshipment hub .To maintain the present momentum and ensure the future growth, the container shipping industry must take measures to strengthen the overall logistics chain.

Switch Bill of Lading

Switch B/L is the new set of b/ls issued upon customer’s request in exchange of the first set of original bill. This is also called ” the traders’ second set”. Switch b/ls are intended to keep the identity of the supplier from the sub purchaser and thus to prevent future direct dealing between the supplier and the sub purchaser. Shipper, Consignee and Notify are the information that are most commonly requested to be changed by the traders. Due care and consideration must be exercised when issuing such bills of lading because of inherent exposure to fraud/conversion of factual data . Furthermore, the agent at POD must confirm that amendment may be performed without fines. If amendment is done too late, cargo declaration may already have been done or even cargo may already been discharged, leading to fines / costs for amendments. These fines/costs are to be borne by the party requesting the amendment.

HIGH SEA SALE.

High Sea sales (HSS) is a sale carried out by the actual consignee (ie, the consignee shown in the Bill of Lading) to another buyer while the goods are yet on high seas or after their dispatch from the port of loading (POL) and before their arrival at the port of discharge (POD). HSS contract/agreement should be signed after dispatch of goods from origin & prior to their arrival at destination. The agreement should be on stamp paper. The word ‘Sea’ appearing in HSS should not be taken by it’s literal meaning. As long as the sale is formalized after dispatch from port of origin and before arrival at the first port of discharge at destination, such sale is considered as HSS.

On concluding the HSS agreement, the B/L should be endorsed in favour of the new buyer. If the seller does not mind disclosing original import values to HSS buyer, in such case it is better from custom clearance point of view for the seller to endorse the B/L, invoice , packing list in favour of the HSS buyer. The endorsement should read "Transferred on High Sea Sales basis to M/S -------- for a sales consideration of Rupees --------". Such endorsement should be stamped and signed by the HSS seller.

Sometime HSS buyers buy goods after their arrival. Such sale are not HSS. The stamp paper on which the HSS agreement is executed must not bear the stamp paper purchase date as being post cargo arrival date. Such a case can easily be detected by customs as being a post arrival sale.

The IGM should be filed by the carrier in the name of the HSS buyer. If not Import General Manifest (IGM) should get amended for which Customs will impose a penalty.

Same goods can be sold more than once on high seas. In such cases, HSS agreement should give indication of previous title transfers. The last HSS buyer should also obtain copies of previous HSS agreement as such documents may be called upon by the customs. HSS is considered as a sale carried out outside the territorial jurisdiction of India. Accordingly, no sales tax is levied in respect of HSS. The title of goods transfers to HSS buyer prior to entry of goods in territorial jurisdiction of India.

Successful Writing - a skill you can develop...

Why writing skills important?

People who have good writing skills enjoy an advantage in almost all situations. If you are a good writer, you are always more likely to get what you want. As your writing skill improves, your self confidence also improve. So it is imperative that you put in some effort / invest time, to improve your writing skill as it will be helpful during the student days and later when you write business proposals / reports / speeches/presentations etc.

What are the elements of good writing.

Good writing is clear , well organised , focused to the subject and should adapt to the audience.
If you take note of below 3 points , you will do fairly well with your assignments / reports.

Analyse the subject

Understand the subject well and select a title based on the purpose of the report. Before you start writing, think about the audience and their level of understanding with related to the subject. And also be careful to treat the subject adequately in the limited space. Generally the assignments would be of 10 – 12 pages (2500 – 3000 words) and very broad treatment of the subject will not be possible.

Your writing is CLEAR if your readers are able to understand the ‘real’ meaning you tried to communicate. Write simple / small sentences to communicate the ideas across. Do not write lengthy , complicate paragraphs. You can chose tools like graphs, pictures , different colouring , letter size etc to make your writing more clearer and appealing to readers.

Organize your report well .

The assignment should have good pattern , (a) an introduction (b) central idea and (c) conclusion, a master plan, which holds all parts together.

Suggest to start with a draft as it will help you to summarize the relevant points in a proper order prior finalizing the report. Write a good introduction which forecast your central idea and formulate a crisp /catchy conclusion.

Chose subtitle which accurately reflects the content and it is advisable to cite the source of information. Do not waste the reader’s time by repeating same points and writing unwanted words / sentences.

Check for spelling and grammar mistakes prior finalizing the report. Must do proof reading to correct the mistakes as spelling / grammar mistakes always send wrong signals to the readers.
Write authentically so that your presence will be felt. To write authentically, you should have good understanding of the subject.

Make your work look good

The white space in and around the writing strongly affect the look and readability of your document. Leave proper margins ,sufficient space between the words / lines , columns , paragraphs etc.

Give proper headings and sub headings to your writing. Readers absorb information better when it is arranged into meaningful units and blocks.Use pictures and graphs , wherever needed, to improve the readability / understanding of the document. Do not use too much of graphics / colors , which will spoil the look of the document.

To Conclude...

Let me remind , writing skill can be developed if you invest genuine time / efforts and surely this will pay off handsomely. All successful writers are not born with 'writing talents' , most of them developed it, for which genuine efforts are required.

Most Turbulent years in the history of liner shipping....

Dear students

Below article I happend to read in Shipping Gazette today and thought of sharing with you all as it is relevant to your chosen feild. This is the right time to get equiped for entering into the re-emerging liner trade, where surely will have a demand for highly competent and qualified people.

Quote

MAERSK Line CEO Eivind Kolding spoke of the tough times that new graduates face when entering the job market, citing excessive overcapacity as one of the main factors behind the container losses in recent years.

"This has been one of the most turbulent years in the history of liner shipping, affected as it has been by both the global economic crisis and excessive overcapacity, bringing about financial losses for all carriers in the industry," he said.

Speaking to graduates at Rotterdam's Erasmus University, Mr Kolding told of the continued need for "highly competent new talent" in the liner sector, which he said would eventually emerge from the current crisis to maintain its role as the main facilitator of global trade and prosperity.

In congratulating graduates of the Maritime Economics and Logistics (MEL) course, Mr Kolding said MEL graduates would be welcomed into what he was confident would be a stronger market sector, emerging from the current crisis to maintain its role as the main facilitator of global trade and prosperity.

Among the students graduating was this year's winner of the 'Maersk Best Thesis Award," presented by Mr Kolding to Baris Demirel of Turkey for his thesis entitled "Private Container Terminal Efficiency in Turkey".

In addition the Prize for Student Excellence was awarded to Daria Vereana Katrin Buchi of Switzerland.

Sponsored by NOL and APL since its inauguration in 2001 the Student Excellence Prize is won by the graduate receiving the highest course marks. NOL Benelux managing director Peter Jongpier presented it.

unquote

Work hard and learn as much as possible now to gear up for a bright and lucritive career in liner sector / logistics / supply chain etc....

What is a Sea way Bill ?

Sea way bill is a type of Bill of Lading which is non-negotiable and allows quick (express) release of consignment to the receiver named on the document. The ownership of the goods cannot be transferred by endorsing the sea way bill. It is a simple receipt of the cargo, incorporating the terms and conditions of the transport contract between the carrier and its customer. The drafting of a waybill is similar to the one of a bill of lading. Only one (1) original is issued, copies may be obtained but photocopies have the same value.

For a shipment covered by a waybill, the receiver can take delivery of the cargo by justifying his identity, original document is not required. A waybill is issued upon request of the shipper.This document is more relevant for non commercial transactions, inter company stock transfers or where the letter of credits are not involved . If a documentary credit (L/C) is used for the commercial transaction, a negotiable bill of lading must be used.

Waybills could be used for
- shipment between mother and sister companies
- Shipments of MNCs
- buyer and seller are working in current account and payment of goods is not again documents
- short transit time
- buyer and seller are entertaining good relationship and thus not using any documentary credit
- for personal effects

Also please make a note that in some countries ( Latin America, Afganistan, Iraq,Iran, Lybia etc) sea way bills are not allowed.