Weathering Geo-political Risks for International Trade and Shipping was the theme of the recent seminar held in Singapore by AMICIE on 14th March.
AMICIE, meaning `friends of the court’ (from amicus curiae), and the full form of which stands as the ‘Association of Maritime International Commercial Interests and Expertise’ is a seven-year old Society registered in Chennai in India.
Capt R. Venkat, its Vice President, welcomed the gathering, and continued as moderator after Capt Sury Pullat the founder President explained what AMICIE stands for with focused efforts, and Capt Suresh Amirapu, President delved into the theme contemporaneously affecting one and all as consumers, impacted by policies, trade, shipping, logistics, et al.
It is well known that shipping/trade economics being derived demands of trade and logistics remain at the mercy of policies driven by politics, money and exchange rates, superimposed on natural resources, locational advantages, seasonal variations and transportation costs for delivered values with tariffs (GATT, WTO), duties, and the likes with unforeseeable fluctuations of Supply-Demand imbalances, punctuated with easy/hard funding and entrepreneurial instincts, and hence do not lend themselves easily to prognosis or forecast!
The panelists were drawn from a wide cross-section of trade, shipping, logistics and segments and sectors of the connected industries with age, knowledge, expertise, gender balance, and nationalities, and included two participants from the United States as well.
Scenario Planning and Crisis Management for ‘Worst Case Scenario’ as in ‘hope for the best, plan for the worst’ like in Murphy’s Law of Risk Assessment with organizational resilience, was the apt starter. Know your counter party, as in `arranged’ Indian marriages, the oft sought `first class charterers’, with Chartering & Operations together pursuing technical (meaning paralegal) process to find solutions was suggested, citing `Cherry’ damage on MAERSK SALTORO, hostile jurisdiction said to be poised to deny limitation to DALI Baltimore bridge demolition disaster, YM TRUTH allision claims spreading globally with Hamburg and even Rotterdam Rules (Tunisia, Georgia) as scary ones!
The Electronic Bill of Lading is yet to gain popularity, not in favour to hide identities, with cargoes in boxes found to be ‘round tripping’, Bulk cargoes getting blended for various reasons like quality, pricing, COAs with sourcing and delivery, inventory management, etc; in other words trade expediting suitable solutions!
Though Trump and Tariff impact were viewed with worries, the consensus is that shipping is used to such impacts, with money, politics and religions running the world with trade balancing, with US Dollar as the dominant main currency after the cold-war, with energy resources enabling globalization. Recent UNCTAD report on such impact and unreliability of Trump’s policies and its effects were also drawn attention to.
That a third of the world will starve, a third will freeze and the other third will go dark without trades was a foregone conclusion stressed by findings from discussions. With Banks invariably the ones enforcing trade restriction measures per force to comply, it could impact at any stage of voyages like War Risk Premiums, leaving crew, shipmanagers and the whole supply chain, floundering.
On Artificial Intelligence that had appeared first in Science papers in ‘50s and in use for a dozen years now, the takeaway was that it was as of now a wish list, with statistics as learning steps, a solution process and not its replacement. As for Passage Planning –with ISM supervision, Weather Routing and Weather Forecast for Post Fixture Claims settlements- AI may not be good enough was the general reservation! That Google may still rule the roost with its new version was welcomed with a sigh of relief.
Whilst Asia’s demographic dividend with affluence is driving trade, with US and Europe at saturation levels, China being the manufacturing base, India’s tight rope walking strategy was found laudable with Oil sourcing and growth in the Chemical sector. As such, AMICIE’s choice of Singapore for brand building was appreciated with the close association of Singapore and India, with Singapore waiving charges for fund transfers to India.
However admirable such efforts be, Indian politicians shouting themselves hoarse about shipbuilding, huge container fleets, and starting an Indian P&I Club, appear misinformed. Instead, a people centric, middle path like that of Singapore persuading the private sector could be a better policy than subsidies for multiplier and trickle-down economic benefits; as what trade wants is cheap and reliable freight and regular services. Liner sector was found to be not that transparent as they profess to be but can be expected to find alternate cheap ports against high port costs being threatened by Trump’s tactics.
Misconceptions about Protection and Indemnity Clubs were alleviated to a large extent by underscoring that they in effect are non-profit making mutual ones with reinsurance spread above certain amounts, and additional premia payable for risk and cover increases.
Each session ended with standing ovations for the 3Ds: Distinguished, Dynamic, and the NOT Disappointing roundups by moderators and panelists.
The futuristic view and vision were one of resource constraints, safety having to come first with new fuel to reduce Carbon Intensity Index within deadlines to manage global warming and on autonomous ships, with transfer of all risks to `maritime insurance’ as envisaged in the Rotterdam Rules.
The interactions during the seminar were found to be educative and useful for students and future managers/professionals, and felt to be a blessing, during this AMICIE’s branding effort and success.
Capt Venkat delivered a sincere vote of thanks to all who had been involved with the planning, organizing, supporting and conduct of the seminar, requesting those present to join for a Sundowner under the full moon.
Marex Media