Lloyd's List - Ship Operations - A dating service for PMSCs
Tuesday 27 May 2014 Lloyd's List Intelligence
http://www.lloydslist.com/ll/sector/ship-operations/article441...
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HIGHLIGHTS: The Lloyd's List topic home page The P3 Network home page Focus on Germany New dawn for Liverpool?
A dating service for PMSCs
Wednesday 21 May 2014, 15:38 by David Osler
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Can the internet revolutionise
MRQ will shortly launch Octopus, a website that will feature
profiles of quality-vetted PMSCs and their operatives.
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Maritime security must be seen as a
profit culture, not an overhead
maritime security?
THINK of it as an online dating service
for vessel operators looking to hook
up with private maritime security companies, for a one-voyage
stand, or just maybe a meaningful relationship.
MRQ, a fully owned subsidiary of German marine underwriters Lampe
& Schwartz, will next month launch Octopus, a website which will
feature profiles of quality-vetted PMSCs and their operatives.
Shipowners are invited to log on with details of their transits in areas in
which they wish to retain armed guards and procure quotes for the
services they wish to hire.
But MRQ is not first with the idea. At least one other similar portal
exists already, most namely Flag Victor, launched in 2011 and still up
and running.
The internet has a number of other maritime security applications, in addition to putting operators in touch with
guards.
AVRA — Automated Voyage Risk Assessment — is a partnership between big sector names Aegis Defence
Services and Hudson Trident, with the backing of the main international shipowner grouping, BIMCO.
Its emphasis is rather different, as the name implies. Rather than providing a marketplace for PMSCs to showcase
their wares, it is designed to offer ship-specific risk assessment in 2,900 ports and 80 sea areas.
To what extent are websites like these changing the actual business of maritime security on the ground? Will the
internet be able to revolutionise the sector, in the same fashion that it has changed the way people shop for music,
films and airline tickets or find a date for Saturday night?
So far as shipping is concerned, the worldwide web has not as yet brought down any household name businesses,
as it did for Blockbuster Video, Borders and high street travel agents.
Those old enough to remember the dotcom boom may recall the grandiose predictions that shipbroking would soon
go the way of the dodo, with owners and charterers going online to cut out the middleman. Fifteen years later,
brokers are very much still around, thank you.
There is no reason to think that there is no room for services such as Octopus, Flag Victor, AVRA and other such
offerings. But do they have transformational potential?
Lloyd’s List met Sebastian Hons and Georg Klöcker, managing directors of MRQ, in London recently, where they
made the case for their new project.
Lampe & Schwartz didn’t so much get interested in maritime security as maritime security got interested in it. The
underwriting side of the firm had to deal with three hijackings of clients’ vessels by Somali pirates in the space of just
a few years. It had also had experience of another hijack in the Malacca Strait a decade or so back.
After the piracy peril was deleted from hull and machinery cover, it was instrumental in the establishment of so-called
German War Cover, acting as managing agent for a consortium of German and international insurers that provided
capacity outside London market or war clubs.
Its management wanted to do something to help it evaluate the risks it faces. But knowing that competition is strong
in the field, it wanted to add some extra service to the insurance product.
Verification tools
Owners began placing armed guards on board, and wanted a reduction in premiums as a result, but needed to know
the quality of the PMSC they were hiring.
Insurance companies, for their part, were sometimes jittery as to whether this was a good idea, and whether the
consequent liability could be managed.
No proper verification tools were in place, just a few white lists. Market reputation can be inaccurate, boosted by
advertising spend, for instance.
Furthermore, many PMSCs hire from the same pool of operatives, who in effect work as freelances. Yet just because
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27/05/14 15:25
Lloyd's List - Ship Operations - A dating service for PMSCs
http://www.lloydslist.com/ll/sector/ship-operations/article441...
a man served 10 years in the Royal Marines, does that mean he will be effective as a security guard on board a
ship? Not necessarily.
Track Your Topic
While a team that shares, say, a common background in the Royal Marines may work well together, a team drawn
Piracy & Security
from different branches of the armed services may not do so, and may even bring in the baggage of past rivalries.
Europe
What was needed, they reasoned, was some means of assessing the quality of PMSCs. Working together with the
German branch of Lloyd’s Register, it set up a five-stage process of certification and vetting for security companies.
The first phase consisted of making sure that privately contracted armed security personnel — PCASPs, in maritime
security jargon — met the applicable ISO/PAS 28007 standard. There were also systematic checks on the company,
Ship Operations
David Osler
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its capitalisation, its organisation and its management.
Email address: hce@lampe-schwartze.de
As a second stage, a psychometric test was developed in collaboration with the University of Bochum, based on a
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questionnaire of 50 possible scenarios on vessels, with a multiple choice of five answers as to how a PCASP would
respond.
Only 10% of these hypothetical situations are combat-related, with the others centred on the ship, and operatives’
interactions with the crew and the captain.
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“It’s not about the 1% of the time when you are attacked by pirates. It’s the other part, being on a ship for a long time,
having no access to electronic devices, not talking to your girlfriend,” says Mr Klöcker.
“It’s hot, you haven’t got much room to move, you are together with people from other nations, other cultures, other
religious groups, other languages.
“This is a situation you don’t learn in the army and it is very important to be able to work in this environment.”
The idea is the gauge the stability of PCASPs as human beings and the way they react in times of stress.
No guarantee
More detailed charts and tools
The touted advantage to shipping companies is that Octopus should mean lean administration when it comes to
matching, selecting and contracting PMSCs. This should prove especially important for small and medium size
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companies without an in-house security department.
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For their part, PMSCs pay for vetting, undertaken by Lloyd’s Register affiliate LRQA, and hand over a percentage of
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what they earn from each transit, in the manner of the fees paid by sellers to eBay.
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But unlike eBay, there is no guarantee that the goods will be as described. The owner and the PMSC are the
Attica Group seeks strategic
partners as it posts a lower
first-quarter loss
contracting parties, with MRQ accepting no liability for any shortcomings.
Mr Hons admits: “We guarantee to the shipping company that we have done the checks, but we can’t guarantee the
quality. We can only say, ‘We did the due diligence, we checked them’. The other thing is, we have a name to lose,
so we can’t afford to cheat.”
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Some of this ground has been traversed before. Most notably, Octopus seems to duplicate much of what is offered
by Flag Victor, a British company that enables owners to post their security needs and invites bids by audited
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PMSCs for the work, at a commission of around 5%.
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At the time of its launch, it claimed to have signed up thousands of vessels. But it is difficult to find out how well it has
subsequently succeeded in doing what it set out to do.
Its founder, Mark Hankey, has since left the company. Lloyd’s List contacted him by email, but he said that he had
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signed a confidentiality clause, which meant that he could not discuss its affairs.
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Its current managing director David Drew said by email: “As the business of Flag Victor is ongoing and we have a
number of private and confidential arrangements in place, we are unfortunately not in a position to provide any
comment in relation to a potential competitor.”
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Viable niche
AVRA seems to have found a viable niche, although it may not yet have realised its full potential, according to Peter
Cook, now a director of the Security Association for the Maritime Industry who had a major hand in its launch five
years ago, as a consultant to BIMCO at the time.
Owners see new opportunities to
use the region’s...
AVRA is about rather more than piracy, offering an assessment of bribery, corruption, fraud, pilfering and other risks.
Sometimes it veers beyond the threat of criminality to wander into the realm of politics, he pointed out.
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“At the time when it was launched, the vast majority of the maritime community was very focused on pure piracy, and
Price talk for coupon is around 6%
there were other products at the time that were more focused on piracy and therefore I think the others got the lead,”
says Mr Cook.
“Having said that, I don’t think there is at the moment one clear product that is head and shoulders above the others.
There is nothing effectively that the shipping industry has picked up and embraced, out of all of them.
“I still think it [AVRA] is an excellent product and its time will come. It was probably pushed out a bit before its time.”
It still has the endorsement of BIMCO, with a spokeswoman noting: “We know that many people use the system,
especially as it is a requirement from some companies. We use it ourselves to inform our work with members when
required.”
Intelligent shipping
Intelligent shipping
A blog about asset performance and innovation in ship
operations
Given his role in Sami, Mr Cook has heard that other similar maritime security internet products are being
considered, although he is not aware of any such projects that have reached fruition.
Assessing security risks for a vessel and then hiring armed personnel to protect it will inevitably be a judgement call.
You cannot sample a PMSC in the way you can listen to your favourite band’s new CD on Spotify and then download
it from iTunes or order it on Amazon One-Click.
There is no substitute for hard-won personal experience in these matters, and the bonds of trust formed in a working
relationship during a time of crisis.
It seems like the internet can only do so much, after all.
Keywords:
Home
, Piracy & Security
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, David Osler
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