INTERTANKO AGM - ATHENS 2005

1. INDUSTRY CHALLENGES - SECURITY THROUGH THE EYES OF AN AGENT INTERTANKO AGM - ATHENS 2005 Leigh Phillips – President

2. Definition of Agency: • A Legal Relationship created by an Agents Agreement to Represent or Act for the Principal • The Agent is empowered by the Principal to: • achieve Savings in Port Expenses • save Time for the Vessel in Port • To this we now add: • ATTENTION TO SECURITY PROCEEDURES

3. TODAYS AGENTS VALUE

4. COST TO THE AGENT • Consumed by Security Time Demands • Increase in Liabilities/Penalties • Immeasurable Risk of Burning out an Experienced Agent • Increased risk of going out of business

5. STEAMSHIP ASSOCIATION OF LOUISIANA (SALA)

6. AUTOMATIC MANIFESTSYSTEM (AMS) • Final Rule – December 2003 • Effective in March 2004 • All Vessels, including Bulk Vessels, carrying Import Cargo must: • become AMS approved Carriers • file their Inbound Manifest electronically 24 hours prior to arrival.

7. MANAGING THE CHANGE CURVE Denial Shock Stage 2 Stage 1 Acceptance Stage 4 Self-Esteem, Ability to Cope, Productivity Resistance Stage 3 Time Time

8. SHIP SPARES NOW MANIFESTED IN AMS • Vessel/Ship spares that are unladed from one vessel intended for export, consumption, repair outside the US or transfer to another vessel must be manifested in accordance with 19 CFR 4.7a (c). The cargo declaration data must be transmitted electronically to CBP via Sea AMS as soon as the determination is made to unload the vessel/ship spare(s). • “The crux of the problem is CBP’s differing requirements based on circumstances. Sometimes spares can be handled via a CF 3171, sometimes spares require an AMS entry …” (In Port Arthur even the cases for 3171 require two additional items, an additional US Crew List or receipt of Crew List, plus a 90 day Port Call List.)

9. SECURITY RULES AND REGULATIONS BURNING UP AGENTS TIME • NOA • CREW CONTROL SECURITY PLAN • OFFSHORE SECURITY BOARDINGS

10. Notice of Arrival (NOA) • Final Rule became Effective April 1, 2003 • 33 CFR 160.212 specifies an NOA must be filed; • 96 hours prior to arrival (for voyages over 96 hours) or • 24 hours before entering the port of place of destination (for voyages less than 96 hour) • NOA INFORMATION CATAGORIES • Vessel Information • Voyage Information • Cargo Information • Information for each Crewmember Onboard • Information for each Person On board in Addition to Crew • Operational condition of equipment required by 164.35 • International Safety Management (ISM) Code Notice

12. NOA CHANGES • 24 hours before entering a port of place of destination (for voyages between 96 and 24 hours) OR • 12 hours before entering a port or place of destination (for voyages less than 24 hours) • A port or place of destination is defined in CFR 160.204 as “any port or place in which a vessel is anchored or moored” • An NOA must include EVERY facility or berth the vessel goes to AND any other place at which it will anchor or moor. • The USCG uses this information as part of its Maritime Domain Awareness efforts. If a vessel has a new facility added or goes out to anchorage, clean tanks, or lighter, they are all “places” under the NOA regs……….even though according to CBP, the vessel never “left” the port. • Changes come into play more times then not particularly for you Chemical Tanker Operators changing facility rotations is constant and continuous.

13. MOST COMMON ERRORS • (See NVMC NEWS) • Website: http://www.nvmc.uscg.gov

14. PENALTY FOR FAILURE TO FILE NOA • Official Tariff Fine: $32,500 • Plus time lost! - UP TO 96 HOURS • Example:

15. THE RESPONSIBLE PARTY • 33 CFR 160.212 States throughout: “The Owner, Agent, Master, Operator, or person in charge of the vessel………….” • USCG NATIONAL VESSEL MOVEMENT CENTER (NVMC) - Notice of Arrival Instructions HINTS and TIPS: “If you are a shipping agent, you can have your clients fill out the spreadsheet on the ship and then have them send you a copy when they send it to NVMC.” • USCG HEARING OFFICE “I noted (from your letter) that the vessel made an attempt to comply with the regulation and that due to an error by your company NOA was not forwarded to the correct office as required by 33 CRR 160.210. However, it isultimately the responsibility of the Master of the vessel for ensuring his vessel meets the security regulations prior to entering port.”

16. OTHER TIME KILLERS • Security Plan • Agent is either ordered to use a Security Company or Master permitted to perform the CCSP. • No Standard submission / approval of Security Plan by USCG or CBP • Security Plan requirements different at every port • Gate List • Facility Gate List needs to be resubmitted daily / edited for every shift change. • Vendors do not know in advance who they are going to send. • Some terminals require information 24 hrs prior to vessel arrival. • All terminals have different Gate list rules, delivery rules, rules for cars on terminal or require use of terminal transportation. • Sometimes we update Gate list 12 times in a three-day vessel call. • In general, there are no standard rules for Security Plans or Gate Lists!!

17. OFFSHORE SECURITY BOARDINGS (OSB) • Adds additional time and frustrations. • ISPS inspections or Sea Marshall usually mean mandatory OSB = extra coordination / cost for Launch (cost for account of Owner/Charterer) • Notices of OSB can come to us 4 Days or 4 Hours Out • Causes changes with the Pilots • Calls for SARS ABC Questions • Must anchor 12 miles out. Requires 4 hr notice for pilot and call to USCG Fusion Center • Inconsistency of ordering OSB’s, and inability to explain to the Owner WHY now, after his vessels has been operating Coast Wise for a week, that his vessel is issued an OSB order.

18. Challenge for USA AGENTS with the current security environment • The Costs are real, and for some, it probably already cost them their company. • Three Major Tanker Agencies have gone out of business in the last four years • All good Agents • All have gone out of business since 9/11 • It is speculated that in the wake of the three companies going out of business, Tanker Operators were left to pay Millions of dollars of Port Expenses a second time.

19. IMMIGRATION RULESThe Human Element • Affects Seafarers the most! • A special note of thanks to the Houston International Seafarers Center and many other World Ports Seafarers Centers. • Ministry of Hospitality: Call Home / Go Shopping / Relax at the Center • The Chaplin takes a phone on board, they have a van for a trip to Store and to/from the Center. • We can also thank the USCG for working with the Center and all the Houston Facilities to give the Seafarers Center the ability arrange their own unfettered access to and from the ships. The Center is the only entity that can put themselves on a gate list without going through the agent. • Houston International Seafarers Center service to Seafarers is indispensable and a bargain for their $85 voluntary fee per port call.

20. SOLUTION FOR THE AGENTS SURVIVAL IN THIS NEW WORLD OF SECURITY • TRAINING • TRAINING • And More TRAINING

21. CONCLUSION My Challenge to the Owners Operators here today • Take an interest in the recently published ASBA’s Agents Criteria for Accounting Procedures, Insurance, Training and Testing Requirements, all geared towards Raising the Standards of ASBA Agents. • Vet your Nominated Agent like your Customers vet your Vessels • Expect continuous improvement in Agency services • Reward your good agents with compensatory fees, these days, their service is PRICELESS