Calls for more regulation for commercial fishermen

A few weeks ago, I commented about the Ethan Allen, and that congressional changes can result from single tragedies, and in particular, my fear that our industry is only one tragedy away from having some changes imposed. Here is a recent story in the on-going saga of the fishing vessel Lady of Grace which was raised on Wednesday [read story here] A link from the South Coast Today's website led me to this related story:

SouthCoastToday.com: SouthCoast fishing advocate asks Congress to improve safety

Rep. Barney Frank, D-Mass., whose district includes New Bedford, called for more federal money for voluntary safety training programs, expanded dockside inspections by the Coast Guard and stricter safety standards for smaller fishing vessels, such as mandatory stability tests

Please do not misconstrue my posting this here. I'm not pointing out that regulation is always a bad thing, or suggesting that more regulation of commercial fishing isn't needed (it probably is). But there is no denying the connection between the tragic events and Rep. Frank's call for more standards. This is why we need to support the efforts of C-PORT to improve and increase our own standards. Our goal should be not to avoid the regulations, but to avoid the tragedies.

On a side note: The South Coast Today has done a truly remarkable job in covering this entire story with fairness and in depth.

NBOA Alive and well

With so much of our industry focused on membership towing programs that support branded towboats, I thought it would be good to remind everyone that one company is still around that has no towboats. The National Boat Owners Association (NBOA) continues to offer towing memberships under a "reimbursement for fees" type membership.

Reimbursement for fees (a term I made up and herein after will be known as R4F) memberships act like an actual insurance policy. NBOA members have to pay for assistance services out of pocket, and then NBOA will reimburse their member up to the limits of the policy, with certain restrictions.

NBOA members are to pay the tower at the time of service and NBOA will reimburse the member for covered towing services provided.

NBOA offers "Full coverage" for towing and assistance for $65/year, which sounds like a bargain compared to the SeaTow or Boat/US. There is a tiny catch, though. To become a member, you have to prove that you have boat insurance with a minimum of $200 of towing coverage:

All members are required to present proof of marine insurance that includes towing coverage of not less than $200per incident. Upon receipt of dues payment and proof of insurance, NBOA will activate towing coverage benefit.

I point this detail out not to accuse NBOA of using some sinister fine print loophole, which they are not: in numerous places on the website, NBOA makes it perfectly clear that their towing membership only covers costs beyond what the marine insurance covers. Indeed, anyone applying for NBOA membership would have to be "underway and not under command" to misconstrue this provision of the membership. I pointed this out just to remind everyone that there are other business models out there, and they each may have advantages and disadvantages.

If you are a service provider, you may want to familiarize yourself with the NBOA Terms & Conditions. (Its actually pretty well written and easy to understand) I don't know how many members they have, but you might be lucky enough to service one, at the full, non-member retail rate for your area of course...

Final note: I couldn't help but noticing one piece of fine print at the bottom of the home page:

COPYRIGHT © 2000-2005 NBOA MARINE INSURANCE AGENCY, INC.

So, perhaps not so much a boat owners association as they are a boat insurance company?

More Indies trying New England market.

Yet another independent tower has entered the already tight towing market on Long Island Sound. (for my geographically challenged friends, that's a large body of water between Long Island, NY, and Connecticut.) American Boating Services is some kind of partnership between two separate companies operating from harbors in Connecticut. They are offering memberships for as little as $75 for boats up to 28', but the membership is only valid during a 6 months boating season. Their out of area coverage seems a little vague:

If you find yourself outside the coverage area and disabled, PLEASE CALL and we will try to work something out for you.

Hers is what really bothers me. They have a Salvage vs Towing page, and in part it says:

Salvage is every boater’s worst nightmare. There is a clear distinction between towing and salvage, and every boater should know the difference. We understand that at a time like that you do not want vultures hanging around. After 25 years of experience with salvage operations, we are well qualified to help make your situation less painful. Our prices are less than any of our competitors, and cost is a very big factor. You and your insurance company will be relieved to know that we do not follow the industry standard of charging 10% of the insured value of the boat. Our philosophy is that the consumer should pay for what he/she is getting.

Why would a company who is actively promoting themselves as salvors want to begin their presentation by comparing the task to every boater's worst nightmare? I would think that the worst nightmare is having a vessel in distress and no one around to help. How can these guys hope to succeed in an industry that they condemn so fiercely? The above quote seems to boil down to this: "We're good guys simply because we charge less." Well, if you were really every boater's best buddy, you should just do the job for free. Whle we're on the subject of nightmares, exactly what is an ABS member supposed to do if they break down outside the coverage area?

Where does this "industry standard of charging 10%" come from? That kind of statement demonstrates a complete lack of any experience or even a rudimentary understanding of how marine salvage works. In all their 60 years of combined experience these guys haven't bothered to read Salcon 89, or heard of The Blackwall case?

It's bad enough when the boating press prints this kind of nonsense, but I think it really sucks when supposed professionals in our own industry stoop to reciting the salvors as vultures BS simply as a means of marketing themselves. And that is all this is folks - an attempt at self promotion with mud slinging and name calling.

Somewhere out there, I can hear the cries; "geeze Doug, chill out!". But here's the thing - if these guys had said on their public website something like "we're cheaper because we work faster, or more efficiently. Our salvage prices are lower because we always charge by the hour", I would say fine, and wish them luck. But printing bogus information and name calling is not the mark of a professional organization, and I think they deserve to be called on the carpet for it.

Heavy lifting

Capt. Charlie Meyer, TowBoatU.S. Lake of the Ozarks, provides this dramatic photo of the power of lift bags. This Case bulldozer reportedly weighs almost 20,000 lbs. Contact Charlie at LAKETOW2@aol.com for more info and links to this story in the local press. (click on photo for larger version)

(Any risk managers out there care to comment on the kid standing in the water?)

Thanks for these great photos, Charlie. Nice job.

Alert! Fishermen use Boats!

File this in the "ya don't say?" category. Or, if you prefer single syllables, file under 'duh!'

RBFF study reaffirms link between boating and fishing

(sorry, I couldn't resist....)

Insurance Profits soar in 2006

"Don't let your insurance company tell you that the rates are rising to make up for losses insurance companies are having." Okay, it's not that simple. But insurance companies actually enjoyed a great year in 2006, in part due to the weather, and in part due to stricter business practices. C-PORT members have done their part by adopting better risk management proceedures and reducing losses in our industry.

Here is an detailed press release from ISO, a leading insurance risk and data base company.

SHARP DECLINE IN VOLATILE CATASTROPHE LOSSES DROVE IMPROVEMENT IN PROPERTY/CASUALTY INSURERS’ FULL-YEAR 2006 RESULTS

JERSEY CITY, N.J., April 18, 2007 — Driven by a sharp decline in catastrophe losses from hurricanes and other natural disasters in 2006, the U.S. property/casualty industry posted a $31.2 billion net gain on underwriting for the year. The net gain on underwriting in 2006 stands in stark contrast to the $5.6 billion net loss on underwriting in 2005. The industry’s positive underwriting results contributed to an increase in its net income after taxes to $63.7 billion in 2006 from $44.2 billion in 2005. Reflecting the increase in net income after taxes, the industry’s rate of return on average policyholders’ surplus (net worth) rose to 4 percent in 2006 from 10.8 percent in 2005, according to ISO and the Property casualty Insurers Association of America (PCI).

Not the most exciting reading, but there is some very interesting numbers. For instance, " ...declines in investment yields have eaten into insurers’ ability to use investment income to support underwriting operations...", which is a reminder that insurance companies make money primarily by investing, not by collecting premiums and paying claims. The stock market can affect the insurance industry more than a hurricane.

Insurers’ overall profitability as measured by their statutory rate of return on average surplus — net income after taxes divided by average surplus during the year the income was earned — climbed to 14 percent in 2006 from 10.8 percent in 2005. The rate of return for 2006 was the highest since 1986...

One final point; spend a minute looking at the entire article. You don't have to read it all, but look at what is there: a detailed presentation of financial data about the insurance industry as a whole. Comparisons, percentages, profits and losses--and with short explainations of how those numbers effect the big picture. Have you figured out how much your net profit rose last year over the year before? What is your average return on investments?

Ship operator loses Jones Act challenge

Thanks to Dave Delano from VAAA San Francisco for bringing this item to our attention: (from MarineLink.com)

Seaman’s Work Extends Beyond Insurance Coverage

The US Court of Appeals for the Ninth Circuit ruled that the marine coverage endorsement on the business insurance purchased by a ship operator did not provide coverage for the on-shore work being performed by a seaman when he was injured. Thus, while the ship operator was liable, under the Jones Act, to the seaman for his injuries, it was unable to recoup those monies from the business insurance company, since the policy only covered work performed on the ship. Source: HK Law

I know a few towing companies who are not carrying separate workers comp insurance. This could have large repercussions in our industry....stay tuned.

SouthCoastToday.com: Lady of Grace salvage awaits break in weather

SouthCoastToday.com: Lady of Grace salvage awaits break in weather

Donjon Marine will be conducting salvage operations on the Lady of Grace in Nantucket Sound, from 56' of water. Raising a 150 ton, 75 foot dragger from those depths is challenge to be sure. If you click on the link above, the South Coast Today website has some detailed coverage of the the sinking, search & rescue, recovery and related events surrounding the tragedy. Lots of interesting reading.

New Independent tries RI market

A new independent tower (i.e. not affiliated with any national membership network) has shown up in Rhode Island. BayWatchRI has at least one boat all painted and in the water (photo). Veterans of the north east might recognize this boat: it was the original SafeSea boat, built by Silverships and powered with a single jet. update: this is an old photo, and I've learned that the boat is no longer this color scheme. Perhaps somebody will forward me an updated picture.

So many questions arise; first of all, what will SeaTow have to say about this color scheme? I guess we know the answer to that....Does black and yellow infringe SeaTow's trademark? I wonder what the real Baywatch (the Los Angeles County Lifeguards pictured here in white boat) will have to say about the name? What will David Hasselhoff (the producer of the TV show Baywatch) have to say? I wonder how wise it is to splash the word rescue on the boat?

Their website claims "all new Eastern towboats". In light of the photo of the old SafeSea boat, perhaps what they meant was "all our new boats are built by Eastern", which at least leaves the option to explain that the old Silverships boat isn't one of their new boats, and wasn't built by Eastern.

Okay, graphics and trademark issues can be dealt with, but what about the challenges that face an independent tower trying to break into an established market like Rhode Island, one of the few places in the country that already supports three membership networks (Safe/Sea, SeaTow and TowBoat/US). It's hard to imagine that there are many potential members left over. It's even harder to imagine that Safe/Sea and SeaTow are going to just going to roll over and let an unproven upstart have easy pickin's at the few non-member jobs that do come up.

So, a new company has so many battles to fight: lack of name recognition on the part of customers and the rest of the local boating community; starting a discounted membership program while facing rising fuel and insurance costs; starting a marine based business during an historically large downturn in the marine industry; breaking into an old, established membership market already serviced by eight or nine brand name towboats.

Ultimately, I'm a fan of capitalism, and as BayWatchRI attempts to meet the challenges I've mentioned, their efforts will place renewed competitive pressures on the established companies. In a service industry, those pressures usually boil down to price and efficient service, which in the end should benefit the customers, right?

Tragedies and Changes

A story in this month's Soundings (April 2007, page 17) updates the court battles surrounding the tragic sinking of the tour boat Ethan Allen, which capsized on a New York state lake in 2005. The company that owned the Ethan Allen, and the captain who was on board that day, have both pleaded guilty and will be paying a fine of $250 each.

(Although I can't link this most recent article, click here for an archive of past Sounding coverage of this story.)

The story goes into some detail about current attitudes towards what does seem to be a small fine against the backdrop of 20 drownings. But what I want to point out here is not measured in dollar amounts, but how quickly calls for law makers to get involved and make corrections, both to the supposed criminal misconduct, and to the regulations that govern boat inspection.

By all accounts, it seems that what contributed to the capsizing was some wake from a passing boat. Why is no one shouting for more enforcement of wake damage laws? Everything in this controversy seems to focus on the charter company and the captain who was driving. Had there been no wake for him to avoid (actually, he turned to take it on the bow), there would be no story at all; no capsize, no drownings, no fines, no guilty party.

Many of you have heard me say that I fear our industry is just one tragedy shy of having huge changes imposed, perhaps mandated by Congress rather than regulatory agencies like the USCG.

Follow the story of the Ethan Allen closely for a good example of what I'm talking about.

Call for Photos

Fellow Towers,
I am looking for some good photos of towboats towing on the hip or alongside. I'm especially interested in pictures showing a hip tow of a powerboat.

Send them to me by email. Thanks

RealClearPolitics - Articles - The Gasoline 'Crisis'

At the risk of offending someone with a political subject, I never the less thought that this Op-ed piece from George Will is worth a read:

RealClearPolitics The Gasoline 'Crisis' du Jour

One concept that he touches on that I always forget is the fact that while everyone (OK, not everyone, but those with the podiums) screams to the heavens about the huge oil profits for the oil industry, it is our state governments who take a bigger share of each gas dollar spent.

IF you can't beat 'em, let 'em beg for your return

Here's a great little story that sums up recent events out in California's Catalina Island. Robert Sherrill actually has the City of Avalon helping to pay the costs of re-building his marine repair barge to comply with their own requirements.

http://www.latimes.com/news/local/la-me-barge4apr04,1,7408011,full.story?coll=la-headlines-california

Whats this got to do with marine towing & salvage? Robert Sherrill, and his father, had a towboat business long before the first towing membership was ever sold. Robert owned Vessel Assist Catalina for many years. The Vessel Assist boats still tie up at the repair barge.

Robert re-built the RELIANT (when he owned her) more than a few times before she finally ended up in semi-retirement as my primary towboat up in Marina Del Rey. Its a safe bet that this little boat has logged more towing hours than just about any marine assistance boat in the country.

I have fond memories of calling Robert on the phone with some mechanical problem that I couldn't solve, and he would know what was wrong before I could finish describing the symptoms. I also remember the time I brought RELIANT over to Avalon because the Cummins blew a rear main seal, and it was under warrantee. At 8am, Robert showed up at the yard and I went to buy us some coffee. I got back at 8:40, and the Cummins was sitting on the shop floor. Robert was working by himself. We launched the boat at about 3pm that same afternoon.


I'm glad to hear that Robert is doing well. As you can see from the story, he is a very tough negotiator.

Boating Industy News

Just what you wanted, more stuff in your email inbox. But, I find the short, weekly Boating Industry News updates sent to me are very easy to scan for pertinent articles that I want to read. Subcribing to the update service is free. Many of the "updates" are just press releases, but press releases are a good way to keep up with what the national networks are up to. Frequent press releases by an organization can also indicate a healthy interest in brand promotion.

Click here to subscribe to Boating Industry News Email Newsletter