:00:00. > :00:08.says it will not mean GPs will be on call 24 hours per day. And now The
:00:09. > :00:16.Bottom Line with Evan Davis. We take a look at the world of shipping and
:00:17. > :00:20.the advent of container ship. International trade has become more
:00:21. > :00:25.possible than ever before. What voyage is the industry and barking
:00:26. > :00:28.on this century? Each week, influential business leaders gather
:00:29. > :00:44.in London for the BBC Radio 4 programme, The Bottom Line. You can
:00:45. > :00:49.see it as well as hear it. I.e. Joint around the table by three
:00:50. > :00:58.people involved the shipping industry ` integral to it but each
:00:59. > :01:08.in very different instances of it. A private company which owns and runs
:01:09. > :01:13.21 ports. Most notably James? The port of Immingham. On the east coast
:01:14. > :01:22.of the UK. On the South Coast we have the port of Southampton. We
:01:23. > :01:31.have a shipper, chairman of Stena Line UK. He is also president of the
:01:32. > :01:41.UK Chamber of Shipping. 15 million passengers in the UK. A few million
:01:42. > :01:47.cars and 1.6 million freight. And we also have an insurer, Rupert Atkin,
:01:48. > :01:55.CEO of Talbot Underwriting and chairman of the Lloyd market
:01:56. > :02:03.Association. I have been in it for 32 years. I have been reading a
:02:04. > :02:07.little about the business. How many fascinating facts and there are.
:02:08. > :02:14.Most of us know very little about your business, what I want is an
:02:15. > :02:20.interesting fact from each of you. A fascinating fact and then we will
:02:21. > :02:27.fill in more details from there. Maybe, James, a fascinating fact.
:02:28. > :02:31.ABP handles 1.3 million containers per year and if you start them
:02:32. > :02:38.together, they would reach from London to Los Angeles. 30 million
:02:39. > :02:50.containers around the world at one time. Vast amounts. A little known
:02:51. > :02:58.fact that 85% of UK trade ` imports and exports ` come by ship.
:02:59. > :03:01.Insurance? I doubt that many people realise that the insurance market
:03:02. > :03:06.has been involved with payments in order to release of the crews that
:03:07. > :03:12.have been captured by pirates off the coast of Somalia. They amount to
:03:13. > :03:19.roughly $500 million. We think as an estimate. If you add on top of that
:03:20. > :03:23.all the legal costs and costs in chord with actually getting the
:03:24. > :03:30.money to the pirates it is north of the billion dollars. Over the last
:03:31. > :03:36.five years. That is a lot of money. We will come back to some of the
:03:37. > :03:43.themes that lets get back to some of the specific businesses. James, tell
:03:44. > :03:55.us about the ports. Most are small and specialists and a few handle the
:03:56. > :04:01.bulk of the trade? The `` there are 120 ports in the UK. The jobs of the
:04:02. > :04:05.ports is simple ` to provide the infrastructure that moves cargo
:04:06. > :04:09.between ships and sure. We are the ones that look after the water and
:04:10. > :04:14.the waterfront and provide the waterfront for the activity to take
:04:15. > :04:22.place. What skills, what distinguishes a good port from a bad
:04:23. > :04:28.port? What would you look out for? For many of our customer's the spec
:04:29. > :04:32.deep, there are certain factors which to be honest to not have much
:04:33. > :04:47.to do with management ` the location and natural characteristic.
:04:48. > :04:53.Southhampton is a natural port. Gateways to from Europe. Having said
:04:54. > :04:56.that, the next thing that a shipping Linux port is for speed and
:04:57. > :05:06.turnaround of servers. The less time a ship spent in port, generally, the
:05:07. > :05:13.better. The second factor is how weekly did you get the cargo onto
:05:14. > :05:23.its onward journey ` onto a truck or train? How quickly do you do that?
:05:24. > :05:31.Ten to 20,000 ` the biggest in the world is 18,000 of these containers.
:05:32. > :05:42.How long does it take? 24 hours. In that time we are looking to move a
:05:43. > :05:49.couple of,000 boxes, containers. We aim to be moving about 30 containers
:05:50. > :05:57.per crane per hour at the container terminal in Southhampton. Sometimes
:05:58. > :06:04.we will have six cranes on a ship. Kenneth, you are a seaman. When the
:06:05. > :06:13.juice first start working on ships? 1959. 54 years ago. I progressed
:06:14. > :06:21.through the ranks. Came ashore in the mid` 70s to take up a position
:06:22. > :06:29.as ship manager, running a group of ships ` oil tankers, container ships
:06:30. > :06:37.` so I have been in the industry a long time. What was your first job?
:06:38. > :06:40.It is interesting, may father was determined that I was not going to
:06:41. > :06:47.go to sea. But I wonder the argument. His compromise was that I
:06:48. > :06:56.would go away as a galley boy on one of the transport system west of
:06:57. > :07:03.Scotland, carrying 1800 passengers. The galley boy's job is to peel
:07:04. > :07:07.potatoes stop he thought that I would be pleading to come ashore
:07:08. > :07:16.after a few months. He said was the master. He said what is your
:07:17. > :07:23.ambition and I said it was to be chief and go over the world. Let's
:07:24. > :07:31.talk about insurance. Rupert Lloyds, how does the insurance work
:07:32. > :07:38.that you're ensuring the cargo and the ships themselves? We ensure the
:07:39. > :07:41.house ` the ship ` the cargo and associated liabilities.
:07:42. > :07:44.the ships themselves? We ensure the house ` the ship ` the You have been
:07:45. > :07:52.involved in the 'Costa Concordia', how much is that cost? A tragic
:07:53. > :08:02.event like that. The 'Costa Concordia' is a very large crew ship
:08:03. > :08:15.that landed off the coast of Italy. The value of the vessel was $900
:08:16. > :08:22.million and the value of the total claim is now around about 1.6
:08:23. > :08:26.billion dollar `` million dollars. The difference between the whole
:08:27. > :08:31.value and the total claim is largely associated with removing the rack. I
:08:32. > :08:39.would like is to drill down to the size issue. The ships have got very,
:08:40. > :08:48.very large. The biggest is about a quarter of a mile long. The biggest
:08:49. > :08:54.we handle is 400 metres. Majestic Maersk is the biggest? The biggest
:08:55. > :08:59.in the world. 18,000 containers. How big can you go? Whether it is an
:09:00. > :09:03.aeroplane or an office block or a shop or a shopping more. The right
:09:04. > :09:08.economic forces tried to get them bigger and bigger and there were
:09:09. > :09:14.also technical and other economic forces that constrain the size. I am
:09:15. > :09:19.interested in how big these things are and what are the forces of
:09:20. > :09:31.enlargement and those constraining how big they can get? One of the
:09:32. > :09:38.first ships I was on `18 months ` UK Europe, through the Panama Canal, to
:09:39. > :09:43.Australia and New Zealand. It took as three weeks to load the cargo for
:09:44. > :09:54.Australia and New Zealand. In various ports. It took us 35 days to
:09:55. > :10:09.get to one port. In three weeks to get to New Zealand. A container ship
:10:10. > :10:19.today... That ship did 15 knots... The average speed today is 23 knots
:10:20. > :10:27.and they carry and do that trip in 19 days. With a crew of 13. We had a
:10:28. > :10:36.crew of 36. It was all manual labour. Unloading is quicker, the
:10:37. > :10:41.journey time is quicker. But it is not as much fun, I can tell you. Why
:10:42. > :10:50.it would you not just go on making them bigger and bigger? A couple of
:10:51. > :11:00.reasons. I have to say, when I first started working in UK ports, 4500
:11:01. > :11:05.Tierce was the largest. These are the 20 foot equivalent units
:11:06. > :11:12.basically a container. A small container. They are now 18,000
:11:13. > :11:16.tears. They have exceeded most people 's expectations. The driver
:11:17. > :11:26.of that is the shared volume of trade. It has moved across the world
:11:27. > :11:33.'s great oceans. Asia, Northwest Europe and Asia to North America. It
:11:34. > :11:42.has enabled the trade is of going hand in hand? The constraint is how
:11:43. > :11:46.expensive it becomes for ours to actually build the infrastructure
:11:47. > :11:52.necessary to handle these very large vessels. The incremental cost of
:11:53. > :11:58.dredging the channel is very, very large. Five inches of dredging
:11:59. > :12:05.Southhampton water is about ?3 million for five inches of
:12:06. > :12:20.additional debt. The numbers built quite quickly. `` depth. The port is
:12:21. > :12:25.a big part. If you take some vessels, they go very fast across
:12:26. > :12:30.the Pacific but they were especially commissioned by Walmart to bring
:12:31. > :12:36.goods in from China to the West Coast of the state and they do not
:12:37. > :12:47.go anywhere else. Having a bigger ship only works if you can fill it.
:12:48. > :12:52.It is an occupancy game. I do think that they have containerised almost
:12:53. > :12:58.everything that they can. It is a sad fact that of the five full
:12:59. > :13:05.containers coming into the UK, to leave empty. One leaves with scrap
:13:06. > :13:10.metal, one leaves with scrap paper in one leaves with something of some
:13:11. > :13:15.value stop they are good to fill them with anything they can. We have
:13:16. > :13:20.this interesting thing that in an empty container they will be sending
:13:21. > :13:31.some Scottish fish to be filleted in China or whatever it is. To
:13:32. > :13:33.underline the point of instant `` infrastructure. Those bigger
:13:34. > :13:37.container vessels, I do not think they can pull in any North American
:13:38. > :13:41.port at the moment and they cannot go through the Panama Canal. There
:13:42. > :13:52.are parts of the globe that they cannot access. The size of the ship
:13:53. > :13:58.increases the tendency towards big risks. But does it change the
:13:59. > :14:01.business at all? There are definitely more complex and
:14:02. > :14:07.definitely more available. People estimate the range of values in a
:14:08. > :14:12.given container as anything between $20,000 `$50,000. So if you have
:14:13. > :14:18.18,300 containers at the higher end of that range, you are looking at
:14:19. > :14:25.nearly $1 billion of cargo. If there was ever a large loss of life, it
:14:26. > :14:30.would stretch our business. Let us talk, we have talked about
:14:31. > :14:37.the size. Other developments in the shipping business. You were hinting
:14:38. > :14:41.at the difficult economic times. It is a cyclical business, basically,
:14:42. > :14:45.isn't it? It does well when the world does well and it does badly
:14:46. > :14:48.when the world does badly. You cannot do anything else with the
:14:49. > :14:56.ships, you cannot turn them into resorts or shopping centres. There
:14:57. > :15:00.are basically ships. Exactly. We have overcapacity in most sectors of
:15:01. > :15:08.shipping at the moment. But the world was doing well in 2006`2007.
:15:09. > :15:18.The shipbuilders work building warships, more tankers. More
:15:19. > :15:24.container vessels. And then what happened, can I say Lehman Brothers,
:15:25. > :15:30.the whole lot collapsed. You cannot just pick a ship off the shelf. It
:15:31. > :15:36.is sometimes three years in the planning. You have to anticipate. I
:15:37. > :15:42.personally witnessed five of these booms and busts. But everything
:15:43. > :15:50.seems to get better. Shipping has cut its costs. Who is in charge of
:15:51. > :15:54.the shipping industry? The employees a multinational. The lower ranks
:15:55. > :16:01.often seem to come from poorer countries. The ships often fly under
:16:02. > :16:05.flag that there are no relation to where the ship was built or the
:16:06. > :16:08.headquarters of the company is. Is that a reasonable summary of how it
:16:09. > :16:17.works? That would be eight perception. But shipping is very
:16:18. > :16:24.well regulated. That is backed up. You can issue rules and regulations.
:16:25. > :16:30.You will soon find crew members that want to abandon. Every ship calling
:16:31. > :16:36.to an American or European or a British port will have a visit
:16:37. > :16:43.possibly even from the flag of that country. They will come down and
:16:44. > :16:47.have it look. If a Liberian ship comes in three British port, it
:16:48. > :16:53.would be inspected by a British coastguard. Exactly. Typically it is
:16:54. > :17:01.an ex` master or chief engineer. What happens if you are not? You
:17:02. > :17:06.ship could end up being detained. The ships are detained. Quite
:17:07. > :17:10.frequently. I would be interested in your perception. One of the
:17:11. > :17:12.questions often asked is how many detentions have you had in your
:17:13. > :17:17.perception. One of the questions often asked is how many detentions
:17:18. > :17:21.have you had any year. One of the good things is to have well
:17:22. > :17:28.maintained vessels. Who are the big players? That is what China does.
:17:29. > :17:35.Not developed countries seeing themselves specialising in. Does
:17:36. > :17:39.that lent itself, obviously China has some of the biggest ports in the
:17:40. > :17:44.world. Does it also mean that China operates some of the biggest ships?
:17:45. > :17:55.The three largest container operators are all European. They're
:17:56. > :18:05.all based in Europe. There is a growing Chinese fleet. But I think
:18:06. > :18:11.the three account for some 40% of the world's container fleet. That is
:18:12. > :18:24.pretty accurate. If you take it into the dry dock section, China had an
:18:25. > :18:33.unprecedented demand. Just the gearing of the country. Owners were
:18:34. > :18:42.building these massive vessels from south America. They came from all
:18:43. > :18:47.places, Australia as well. They found that it was boomtime. 250,000
:18:48. > :18:54.tonne vessel. Chartered by the Chinese to fill this to mind.
:18:55. > :19:00.Suddenly the Chinese for strategic reasons decided that they were
:19:01. > :19:07.overheating. They cut back on these imports. There are starting to pick
:19:08. > :19:15.up again, I understand. That affects shipping. Some of them do it
:19:16. > :19:19.recklessly. But some of them are just trying to keep up with demand.
:19:20. > :19:28.If you are to talk about what keeps you up to tweak `` at night, piracy.
:19:29. > :19:34.Have been some high`profile cases, but is a pretty big part of the
:19:35. > :19:40.business. It presents a moral dilemma. Should these payments be
:19:41. > :19:49.made? Are we fuelling the fire of the problem? You are paying ransoms,
:19:50. > :19:54.basically. Yes. I thought you were not allowed to pay ransoms in some
:19:55. > :19:58.jurisdictions? Technically I am telling them ransom because that is
:19:59. > :20:02.what people understand them to be. If we were to get technical about
:20:03. > :20:10.it, it is actually a payment being made to prevent the loss of our
:20:11. > :20:15.property. We do not ensure the crew themselves, we ensure the ships and
:20:16. > :20:22.the cargo. We pay the money in order to have the research vessel
:20:23. > :20:26.released. But everybody else would say it is obviously a ransom to get
:20:27. > :20:32.the crew back. It is, but we are dealing with the shipowner.
:20:33. > :20:45.Attempting to avoid us having a further loss. We have to negotiate.
:20:46. > :20:49.This is very close to my heart. Between the ships that we are in
:20:50. > :20:58.ourselves and the ships that we manage, we have a ship per day in a
:20:59. > :21:03.piracy hotspots. We have a moral duty to look after these people as
:21:04. > :21:07.best we can. If it comes to considering paying a ransom, we
:21:08. > :21:12.would certainly do that. Just consider this point. If it comes out
:21:13. > :21:17.that the British government said that they do not want us to pay
:21:18. > :21:20.ransoms, how are you going to get the crew demand these ships that
:21:21. > :21:27.carry these goods, the 85% adjusted to the UK alone, if the crew believe
:21:28. > :21:33.that there are going to be abandoned because the ransom is going to be
:21:34. > :21:37.paid? We have a duty to make sure that we get our crew out of danger.
:21:38. > :21:42.How many people are we talking about? Five years ago, six years ago
:21:43. > :21:49.there were over 1000 seamen incarcerated on ships that had been
:21:50. > :22:01.taken by pirates or a pirate cabs. `` in pirate cabs. I think we are
:22:02. > :22:07.down to under 40 at the moment. Sadly the Korean fishing boats or a
:22:08. > :22:15.Bangladesh or in the Indian Ocean, we know this. Even if ten airline
:22:16. > :22:19.passengers five years ago had been incarcerated on it would have been
:22:20. > :22:29.resolved. This is primarily because these are not European. Exactly.
:22:30. > :22:40.They are Filipino, Indian, Bangladesh, Indonesia. The world
:22:41. > :22:45.turned its back on them. There are other hotspots of piracy. West
:22:46. > :22:49.Africa is now on the rise. That is a different type of pirate. He is not
:22:50. > :22:57.interested in taking the ship to get a ransom for the crew. He wants to
:22:58. > :23:03.take the cargo and sell it. Where is very possible market to sell cargo?
:23:04. > :23:09.Trust me, there are plenty. He will not let the crew stand in his way.
:23:10. > :23:17.There are many issues facing shipping, sulphur emissions down to
:23:18. > :23:22.the world economy. It is all about money. But piracy is life and death.
:23:23. > :23:31.We need to bring this voyage to an end. Let me thank my guests. James
:23:32. > :23:42.Cooper, Kenneth MacLeod and Rupert Atkin. Thank you to the three of
:23:43. > :23:48.you. Thank you at home for listening. Join me next week when I
:23:49. > :23:52.will be back for with more guests. Do not forget, downloads of the
:23:53. > :23:57.bottom line are available. Details on the website. You can also listen
:23:58. > :24:00.to it on BBC Radio 4. We also like to get your e`mails. Just drop us a
:24:01. > :24:02.line.